This paper will explain what agency of necessity is and how this agency arises. Agency is the work done by an agent. An agent is a person that has a contractual obligation with a principal to bind the principal to a third party without the agent being party to the contract. The contract then becomes one between the principal and the third party. In lay terms, imagine parties A, B and C. Party A gets into a contract with party B whereby B has been given powers by A to find C and get C to enter into a contract with A without B owing any obligations to A and C in the resulting contract.
An agency can be created by anyone and without any formalities. Whatever the agency arising, an agency can be created by parties expressly deciding to enter into a contract or by law. In the latter kind, the parties need not even talk or agree on the contract but circumstances arising can make them be contractually bound under the law. In the former kind, a contract with terms is drafted and signatures appended or it can be verbal but two or more parties meet and discuss the contractual terms of the agency. Among the circumstances that create agency under the law is one that of necessity.
The law assumes that a person can act on behalf of another in an emergency with the sole purpose of commercially protecting the interests of another. In such situations, the law awards the person found at the scene of emergence the authority to enter into a contract on behalf of another, even without the knowledge of the other. This is what is called the agency of necessity. An example of a scene of emergence can be whereby a transporter engaged to transport tomatoes from Mkushi farming block to Kasumbelesa experiences a major break down in Ndola town.
The emergence shall be that the tomatoes will get rotten if they stay on the truck waiting for repairs. The transporter can be awarded an agency of necessity under the law if he engaged another truck to get the tomatoes to kasumbelesa in time to be sold or if he went into a sale contract with Shoprite, Ndola to sell off the tomatoes. The law requires that certain conditions be met for one to claim an award of agency of necessity. The law requires that a real commercial emergency occur for one to claim agency of necessity.
The law will not recognize situations that a person in charge of the goods at the time perceive or assumes to be an emergency but will recognize a situation whereby even the owner of the goods if found in such a situation will consider it an emergency. So the situation to qualify as an emergency should be genuine in the public eye. The case of The Great North Railway v Swarfield illustrates what an emergency is. In the case, the defendant bought a horse from one town and sent it to his address which was in another town. The address was just his name and the town where the horse was going.
Upon the horse arriving at its destination, the defendant was not there to receive and his actual address was not known. The carrier, it being the plaintiff, left the horse in the care of someone who looks after horses. The defendant showed up later and was asked to pay for the stay of the horse by the keeper. He refused. The plaintiff later settled with the keeper and sued the defendant. It was held that an agency of necessity was present as there was an emergency and thus the plaintiff was entitled to recover the amount paid to the horse keeper from the defendants.
It should be noted from the above case that the plaintiff upon delivery of the horse in the town mentioned by the sender could not get locate the sender as he had given an incomplete address. The option left to the plaintiff was either to let the horse loose or to put it in the care of someone. The first option could have meant the defendant losing the horse either through theft or starvation. This could have shown negligence on the part of the plaintiff. Therefore the second option was done in good faith as it preserved the item of the defendant.
It should be noted that the plaintiff acted in the best interest of the plaintiff and was driven solely by the need to preserve the property of the defendant and not to profit. The law further requires that a situation of incommunicado should exist between the person claiming agency of necessity and the owner of the goods or the principal. This is important in that one should first get instructions from the principal on how the items or case in concern should be handled before acting on them in any way.
The law does not encourage persons to bind others into contracts without their knowledge or say. In this regard, it is a requirement that one gets instructions from the person he is about to bind into a contract. The case of Springer v Great Western Railway illustrates the need to get the views of the potential principal before binding him. In the case a consignment of perishables were consigned to some destination in the United Kingdom. The goods were to move first by ship to point A and then by train to point B.
The ship could not start off for three days due to bad whether. Upon arriving at point A, the railway employees were on strike so there was a delay for two days. The tomatoes were sold off by the railway company as it feared that the goods will go bad. The owner of the goods brought action against the railway company for selling off his goods and the railway company pleaded agency of necessity. It was held that the railway company could not plead agency of necessity as it failed to get instructions on what should happen to the goods from the owner.
The above requirement has of late become impossible to ascertain due to the advancements in information and communications technology. It is thus very difficult for one to claim agency of necessity nowadays as the requirement to communicate with the potential principal cannot be justified before the courts. Finally the law requires that whoever pleads agency of necessity should have acted in the best interest of the principal and not to his interest. This is to avoid people employing themselves by unnecessarily binding others into contracts were the gain is for the agent.
In the case of Sachs v. Miklos the defendant agreed to keep the plaintiff’s furniture free of charge. Later the plaintiff and the defendant lost contact. The house of the defendant was bombed and the room where he kept the plaintiff’s furniture survived. He tried to communicate with the plaintiff but failed. He sold off the furniture to create room for himself. When the plaintiff resurfaced, he sued the defendant who then claimed agency of necessity. It was held that the defendant did not act in the best interest of the plaintiff but for himself.
It should be noted that acting in the best interest of the principal is not enough to justify a claim of agency of necessity. This is so because acting in the best interest does not over-rule express instructions given. If the principal has given instructions to the agent, the agent is not required to divert from them even if they will place the principal in a bad situation. The agent can advise and try to change the mind of the principal so that he issues new instructions which will be to his advantage.
If the principal refuses then the agent has to go by the instructions given. In the case of Fray v. Voules an attorney was engaged to conduct matters on behalf of his client. He was advised by counsel to reach a compromise which was contrary to the instructions of the client. It was held that the attorney had no authority to enter into a compromise against the express instructions of his client even if the compromise was good for the client.
The agency of necessity arises when the law assumes that a person can act on behalf of another in an emergency with the sole purpose of commercially protecting the interests of another. This can only be acceptable when three conditions are fulfilled. It is required that a real commercial emergency should be in place; the situation should be such that it is impossible to receive instructions from the potential principal; and that the action of the agent should be in the best interest of the principal.