CONTRACT DEFINED.

Auckland Star, Volume LXIX, Issue 226, 24 September 1938, Page 10

CONTRACT DEFINED.

SALE OF CITRUS FRUIT. SHIPMENT FROM SEATTLE. j (By Telegraph.—Press Association.) , W ELLINGTON, Fridav. The essential element of an agency [ is to establish privity of contract be- , tween a principal and a third party, . and it would seem that, if the agent fails to do so, either the contract never comes into being or the agent himself > becomes the contracting party," said Mr. r J* H. Luxford, S.M., in the course of a l eserved judgment in an action between " Thompson Brothers, Limited, and the , Ngw Zealand Trading Corporation, ' Limited. The case related to fruit ordered from I a Seattle firm, Groat and Company, forwarded in substitute form, and sold by plaintiffs on behalf of the defendants, to whom the plaintiffs looked for J reimbursement of any loss. I The magistrate said the law was , clear that, where a person professed a , contract as agent, whether in writing j or verbally, and it was shown that he was himself the principal, and was acting on his own behalf, he was person- - ally liable on the contract. The effect of . this' was that the Court was able tolook at all the surrounding circum- } stances and determine from them whether the person purporting to contract as agent did, in fact, so contract or not. "In order to establish privity of contract between Groat and Company and k the plaintiff it was necessary for the defendant to submit a contract to Groat and Company for confirmation and completion, but the defendant company did i not do so. It merely ordered in its own t name and paid for a quantity of citrus 1 fruit, including the fruit oidered by the t plaintiff. When this fruit arrived in a New Zealand the defendant appropriated I part of it to (Hie plaintiff's order." The - magistrate found that the defendant 1 contracted as principal, and gave judg- - ment for £72 15/6, less £6 5/8 paid into Court.