This document discusses the duties and roles of agents in international business transactions. It covers the duties of agents to act with due diligence, comply with instructions from principals, not delegate duties without permission, maintain confidentiality, and account for any profits made using confidential information. It also discusses the duties of principals to pay agreed remuneration to agents and indemnify them for any losses incurred during authorized business. The document examines how contracts are formed between agents and third parties, and what agents like factors, brokers, commission agents, and del credere agents do to facilitate international trade deals.

1. INTERNATIONAL BUSINESS
LAW (WLW20103)
AGENTS IN INTERNATIONAL BUSINESS TRANSACTION

2. INTRODUCTION
• International trade necessarily involves many different arrangements
and transactions. These transaction are highly complex and are often
situated in a country foreign to the trader. It is thus the Herculean
trader who is able to handle and manage all these transactions
without employing specialist agents. Indeed, in any international
trade, endeavor is accounted for in marketing, business strategy and
costing.

3. DUTIES OF THE AGENT
• A relationship of agency might be said to arise when a person is deemed by
the law having the authority to enter into certain legal relationship on
behalf of another with a third party.
• Presumption of agent:
• a) authority is present whether because there is a contract (express &
implied) between the agent & principal to that effect
• b) where the principal had made some representation that the person
purporting to act on his behalf is his agent
• c) where the circumstances are so pressing that it would be just and fair to
bind the principal to the actions taken by a person (agent) to help protect
or save the principal’s property or interest
• d) where the principal subsequently ratifies the acts taken by the person
purporting to act on his behalf

4. DUTY OF AGENT IN IMPORT-EXPORT
PRACTICE
• a) to market a particular product
• b) to penetrate a market known specifically to the agent by virtue of
his skill, experience and personal attributes
• c) to secure sub-agents to sell a product
• d) to elicit information relevant to the principal’s business
• e) to represent the principal at trade fairs, publicity events and
conferences
• f) to secure credit on behalf of the principal
• g) to procure certain goods or service for the principal

5. DUTY OF AGENT
• A) Duty to exercise due diligence in the performance of his duties and to
apply any special skills which he professes to possess.
• Keppel v Wheeler [1927] 1 K.B 577
• The duty is measured against the reasonable standard of care required of
the type of professional that the agent claims to be.
• Chaudhry v Prabhakar [1988] 3 ALL ER 718
• The court held, even a friend could be made liable although the friend was
only gratuitous agent. The standard of care imposed on the agent is based
on what he or she professes to be, given the circumstances of the case.

6. DUTY OF AGENT
• B) Duty to comply with lawful instructions
• Case: Collen v Wright [1857] 8 E & B 647
• The duty to comply with instructions makes it imperative that the agent
should not exceed his authority. When this happen, either because he
acted when he had no authority to or he simply went beyond the remit of
his agency, the law makes him liable for breach of warranty of authority at
the suit of 3rd party with whom he professed to make contract on behalf of
his principal.
• Case: Nimmo v Habton Farms [2003] EWCA Civ 68

7. DUTY OF AGENT
• C) Duty not to delegate
• Maxim: Delegatus non potest delegare
• Case: de Bussche v Alt (1878) 8 Ch.D 286
• Confidence in the agent is at the root of the agency, hence there is in general
a duty on agent not to delegate performance of his duties to a 3rd party.
• Exception: where the delegation has been agreed to by the principal.
• Case: Solley v Wood (1852) 16 Beav 370.

8. DUTY OF AGENT
• D) Duty of confidence
• Case: Kelly v Cooper [1993] A.C 205
• It is conceivable that the scope and details of the duty may be qualified by
contractual terms because although the fiduciary nature of the agency is
fundamental, the agency ultimately remains a contract subject to the
contrivance of the parties. Any derogation must not amount to the total
exclusion of the fiduciary nature of the agency, for to do so is to effectively
change the legal nature of the agency relationship.
• Fiduciary duties according to Lord Wilberforce; the obligation not to profit
from a position of trust or, as it is sometimes relevant to put it, not to allow
a conflict to arise between duty and interest, is one of the strictness.

9. DUTY OF AGENT
• D) Duty of confidence
Case: Boardman v Phipps [1967] 2 A.C 46
Agent must account to the trust for the profit they have made from
their own investment because the profit they made was the result of
their fiduciary position as agents to the estate and the knowledge they
acquired while acting in the capacity of the fiduciary agent.

10. DUTY OF PRINCIPAL
• A) To pay the agent the contract remuneration
Case: Way v Latilla [1937] 3 All ER 759
HOL held that an agent is only entitled to his remuneration if that
remuneration is the substance of an implied or express term.
Case: Millar, Son & Co v Radford [1903] 19 T.L.R 575
Estate agent rights to their commission does not arise out of the mere fact
that they have introduced a tenant or a purchaser to the principal. It is
necessary to show that the introduction was the effective cause in bringing
about the letting or sale.
Case: L French & Co. Ltd v Leeston Shipping Co [1922] 1 A.C 451

11. DUTY OF PRINCIPAL
• B) Duty to indemnify the agent
• Case: Christoforides v Terry [1942] A.C 566
• The broker who made speculative purchases of cotton on behalf of the
principal was compelled to close the account and sell existing stock when
prices fell. He was liable personally on these contracts. However, as he had
been authorized to do so, he was entitled to be indemnified by the
principal.
• Case: Lage v Siemans Brothers & Co Ltd [1932] 41 L1.L.Rep 252
• As the losses or liabilities were incurred as a result of the agent’s
insolvency or default, the principal is relieved of the duty to indemnify.

12. CONTRACTS MADE BY AGENTS
• A) where an agent contracts on behalf of a named principal
General Rule : Agent does not incur any rights or liabilities under the
contract. However, there are several exceptions to the GR
a) Where the agent executes a deed in his own name, he is held to be
liable on the deed
b) Where he signs a bill of exchange in his own name and does not
signify that he is doing so as an agent, he is liable on his signature

13. CONTRACTS MADE BY AGENTS
• A) where an agent contracts on behalf of a named principal
c) Where the circumstances of the case are such that it is quite clear
that the agent had assumed personal liability
d) Where a trade customs imposes liability on the agent
e) Where the agent is in fact the principal in the contract although he
may have purported to do so as an agent

14. CONTRACTS MADE BY AGENTS
• A) where an agent contracts on behalf of a named principal
Case: The Swan [1968] 1 Lloyd’s Rep 5
The shipowner was the director of a company to which he hired The Swan.
The company then instructed the claimant to repair it, with the instructions
being signed and approved by the director. The company was unable to pay
for the repairs.
Held: On the issue whether the shipowner was personally liable as agent of
the company, the court held that when a shipowner discussed ship repairs
with a repairer it is only reasonable and natural for the repairer to assumes
that the owner will pay for the work unless the contrary was clearly
stipulated.

15. CONTRACTS MADE BY AGENTS
• B) Where an agent contracts on behalf of the unnamed principal
• Case: Universal Steam Navigation Co. Ltd v James McElvie & Co [1923]
A.C 492
• The agents were not personally liable for demurrage arising from the
charterparty even though they were described as “charterers” because
it was known to the shipowners that they were chartering the vessels
as agents.
• Case: Parker v Winlow [1857] 7 E & B 942
• Where the agent does not make it clear that he is contracting as an
agent then he will have to bear personally the liability for that contract.

16. CONTRACTS MADE BY AGENTS
• C) Where the agent contracts as agent for undisclosed principal
• Case law: Nueva Fortuna Corporation v Tata Ltd [1992] 2 Llyod's Rep
497
• The principal was not bound to honour a contract made purportedly on
his behalf when the principal’s lack of consent was in fact known to the
3rd party. The principal, however, may intervene and make claim based
on that contract. This means he is liable to bring action on the contract
against the 3rd party. The 3rd party, on the other hand, after discovering
the identity of the principal, may elect to enforce the contract either
against the agent or the principal. This election, however, binds him
and he is not allowed to change his mind.

17. AGENTS RELEVANT TO INTERNATIONAL
TRADE
• A) Factors: A person in possession of goods belonging to his principal
to be sold for the benefit of latter.
• Case: Lloyd’s Bank v Bank of America National Trust and Savings
Association [1937] 2 K.B 631
• The buyers had been given an advance for the purchase of certain
goods on the security of the bills of lading relating to the goods. The
bills were subsequently returned to the buyers to enable them to sell
the goods on. The buyers gave an undertaking to the Bank of America.
• The court held that the buyers had received the documents of title as
mercantile agents of Llyod’s Bank and as such the pledging of the
documents with the Bank of America was binding on their principal
Lloyd’s Bank.

18. AGENTS RELEVANT TO INTERNATIONAL
TRADE
• B) Brokers – A person negotiates on behalf of the buyers and sellers.
His business is only to introduce customers to sellers and vice versa.
• C) Commission agents – A person enters into contracts with 3rd parties
in his own name, although he does so as an agent. He is therefore privy
to the contract with the 3rd party and as far as the 3rd party is
concerned, recourse may be had to the commission agent.
• D) Confirming houses – takes role of an agent for an overseas buyer
who is interested in buying goods from seller in the country.
Confirming house can buy the goods under his own name and resell
the goods to the buyer.

19. AGENTS RELEVANT TO INTERNATIONAL
TRADE
• E) Del Credere Agent – takes on additional risks, like the confirming
houses. The terms as such that the agent only agrees to indemnify the
principal in the event of the buyer not taking delivery of the goods or
becoming insolvent and unable to settle the purchase price.
• F) Forwarding agents – The duties of freight forwarding agent are
determined by contract. Almost everything is open to agreement. The
general duties include:
• i) to ascertain the date and place of sailing
• ii) to obtain a space allocation if that is required
• iii) prepare the bill of lading by filling in the relevant standard form bills
of lading issued by the shipping lines

20. AGENTS RELEVANT TO INTERNATIONAL
TRADE
• G) Loading Broker – agent employee:
• i) to arrange for the goods to be brought alongside vessel
• ii) to make the customs entry for cargo
• iii) to pay dues on the cargo
• iv) after shipment, to collect the compelled bill of lading and send it to the
shipper
• H) Marine insurance brokers – the agent of the insured and no one else
when the insurance is placed by the broker. The broker may:
• i) undertake an obligation to secure cover for the principal’s cargo using all
reasonable care and skills
• ii) undertake to investigate the risk and advise on the appropriate cover
• iii) ensure that the risk is adequately presented to the insurer
• iv) agree to assist in making the insurance claim