Agent and Principal in UK Law

It is clear that the "damage" suffered by a commercial agent as a result of the termination of the agency (Regulation 17 (6)) is – generally speaking (and breach of contract cases aside) to be regarded as a putative loss and not simply (by common law standards) actual loss. This is shown by the exclusion of principles of mitigation and applicability of the compensation provisions to termination on death or retirement.

That is, as was discussed in the course of submissions, to secure and restrict a first-class mechanic as distinct from securing and restricting anyone with a real commercial involvement. In my judgment, the submission really seems to demonstrate the improbability of parties such as these making such an agreement. Moreover there were restrictions on a change of Agent and Security Trustee provided for in the Restated Credit Agreement (clause 19.15) and the Intercreditor Deed (clause 12.11).

Read literally, subsection (2) might suggest that the principal must authorise the act of discrimination itself before liability arises. In my judgment, Parliament must have intended that the principal will be liable wherever the agent discriminates in the course of carrying out the functions he is authorised to do. It is a moot point whether the common law would in any event impose liability in these circumstances.

If that analysis is right and the principal can be liable even though he has not authorised the act of discrimination itself, it follows that the act itself may be — and no doubt usually will be — without the principal's knowledge or approval. It is perhaps surprising that the draftsman did not make this plain in sub-section (2) as he did in subsection (1).

When the purchaser pays a deposit to an estate agent, in the course of negotiations before any contract is concluded, there is clearly an implied promise by someone to it repay it if the negotiations break down. When the negotiations break down, he must return it to the purchaser. The purchaser can sue the estate agent for money had and received which is based on an imputed promise to repay.

It was also common ground that, as a general rule, the putative agent cannot clothe himself with ostensible authority. SEB accepted that it does not rely on any of the exceptions to that rule. SEB, however, relies on the rule that an agent whose actual authority has been revoked will continue to have ostensible authority as regards a third party who has previously dealt with him and who has not had notice of the revocation.

It is necessary to identify conduct which was only consistent with such an agreement or mutual intention and inconsistent with any other intended relationship between the two Vitol Group companies. Put another way, it must be fatal to the implication of an agency relationship if the parties would have or might have acted as they did in the absence of such a relationship: see, by analogy, cases such as The "Aramis" [1989] 1 Lloyd's Rep 213 and The "Gudermes" [1993] 1 Lloyd's Rep 311.