PRINCIPAL AND AGENT.

Otago Daily Times, Issue 14341, 10 October 1908, Page 14

PRINCIPAL AND AGENT.

tA.t the last meeting of the Accountant Students' Socfoty, Mr J. .\i. K. Garrow refrf an able (ind extremely interesting paper on the subjcct of principal and agent. A few of tile HKbt cogent liassugcti follow: Alt agont id a penson having expim or implied authority to represent or act on behalf of another person, who is called his ... .principal. A principal muei have full contractual capacity, but the agent need not have fiuuh capacity. An infant, for example may enter into a valid contract W.ndMg on his principal, iiltluoiiKli lie could not enter into such a, contract for himself. All infant is not bound to pay for goods unless tlicy arc iKmsaxiee, but a principal would be bound by purchases made 011 his behalf by an agent, whether for necessaries or not. By law fh e contrast of a married woman are prima facic mado on her own behalf aiwi to bind her separate estate. Her husband i 3 i c be liable on her contrae[« only when sho acts as" hia agent in entering into those contracts, The husband's .liability ,Testa entiVdy on the ground of agency. The general rule is that an agent must coit- , ,traot ae agent, for a principal who k oontemplatijig, and who must be in existence At the tune, for suoh things as the principal can and may lawfully do. A good example ..of/ tho rulo that the principal must be in existence is furnished by tho contracts made fcy promoters of companies before the company is formed. The promoters themselves arc liable for the contracts entered 'into by thorn 011 behalf of the future company. Agents are classified into: Auctioneers, brokers, commission agents, del credere agents, and factors (or mercan. tile agents). Knowledge obtained by an agent when lie is acting within tho scope of his authority will bo imputed to his principal. A good illustration of this .rulo is furnished by tbo rase of Bawdon T.C London, Edinburgh and Glasgow , Assurance Company. The plaintiff effected an insurance.against accidental injur)- with tile defendants through their agent, the proposal for tlio insurance which formed *th£ basis, of the contract contained a statement by the assured that, lid had 110 physical infirmity. At (he time when he Bignod the proposal tbo assured .had lost the sight of .one eye, a. fact of which defendants' agent was aware, though lie did not communicate it to the defendants. The ' Airing the currency of the policy, mot with an accident,- which resulted in tlie complete loss of .sight in. his otticr oye, ■so that lie became permanently blind. It was held tliat the knowledge of t.lieir agent must be imputed to tho defendants, and that they were consequently liable on the policy.