Lecture notes
Commercial Law and Practice LG03 D2
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- Commercial Law and Practice
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- City University (City)
Commercial Law and Practice LG03 D2
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LEGAL PRACTICE COURSECommercial Law and Practice
Large Group 3: Exercise 6.2 - suggested answer
Fred, the owner of a shop selling antique English goods, has several Victorian footstools for
sale. Fred is an eccentric and is well known for his dislike of South Africans. Jeff, a wealthy
South African, knows that Fred is unlikely to sell a footstool to him. He asks his friend,
Shelagh, to go to Fred’s shop and buy one of the footstools on his behalf. He will pay
Shelagh 10% more than she paid for it. Shelagh agrees to buy two footstools from Fred for
£800 and she also agrees to buy an old brass coal scuttle for £90 from him. Shelagh pays
Fred a 50% deposit for all items and leaves them at Fred’s shop. She says she will be back
with the rest of the money the next day.
Jeff is thrilled with the deal she has negotiated for the footstools. He also wants to take up
Shelagh’s offer to sell him the coal scuttle for £120.
However, before Shelagh can return to Fred’s shop with the balance of the money the next
day, Fred learns of Shelagh’s association with Jeff and purports to cancel both agreements.
(a) What remedies are available to Fred? Consider the footstools and coal scuttle in turn.
(b) Can Jeff (i) intervene and enforce either contract?
(ii) ratify either contract with Fred?
Answer
Jeff = Principal (P); Shelagh = Agent (A) and Fred = Third Party (TP).
Shelagh is the agent for Jeff for one footstool, but not the other or the coalscuttle.
First footstool - Shelagh has authority to act as Jeff’s agent. No need to disclose identity of
principal – nothing in facts to suggest that Shelagh misrepresented to Fred. As an
undisclosed agent, the contract is initially between Shelagh (A) and Fred (TP), but once Fred
discovers Jeff’s existence as P, Fred could enforce against either Shelagh or Jeff, not that he
wants to in this case.
Fred’s dislike of South Africans is not material to the contract and is not a valid reason to
cancel.
Jeff, as P, can enforce the contract for the first footstool against Fred – specific performance.
Shelagh, as A, will be entitled to her commission from Jeff (P).
Only Shelagh can enforce the contracts for the second footstool and the coalscuttle against
Fred, as Jeff was not P in those contracts. Jeff cannot ratify those contracts because
Shelagh was not purporting to act as an A for Jeff (she did not disclose him as P). However,
Shelagh is free to sell the second footstool and the coalscuttle to Jeff if she so chooses. She
would not receive commission from Jeff (as not A), but could of course, mark up the price in
the sale to Jeff.
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