Ian Brown – The Significance of General
and Special Authority in the
Development of the Agent’s External
Authority in English Law
Public policy
The rationale of general authority was that P’s responsibility and A’s authority both
emanated from the relationship of principal and agent per se.
This was an actual authority that could not be negated by P’s private instructions given to.
In terms of public policy, it facilitated the unimpeded progress of early commerce and
adopted the TP’s standpoint.
Commerce
When commerce became more complex and impersonal, it became increasingly difficult to
assert that agents who did not belong to any recognised category could possess an
irrefutable core of general authority.
Apparent authority seemed to provide a logical justification for P’s liability once the
functions of commercial agents had begun to broaden and mutate.
Why did general authority decline and apparent authority prevail?
1) Nemo Dat
The external authority created in [Pickering v Busk] almost immediately came into conflict
with the accepted rule ‘nemo dat’.
An authority to sell could be created in another without too much difficulty.
When coupled with the decision’s unequivocal preference for the third party’s perspective,
this had the capacity to undermine ‘nemo dat’.
2) Estoppel
Estoppel reasoning harmonised with consensual theories of contractual liability when ‘the
courts looked for some plausible basis on which to rest the principal’s liability where he had
not authorised the agent’s act’.
The concept of apparent authority in the form of holding-out and estoppel increasingly
became the touchstone of liability and many decisions were premised exclusively on that
ground.
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