“A Number of Interesting Puzzles involving the Law of Agency”: VMS Enterprises Ltd v The Brexit Party Ltd
DOI | 10.3366/elr.2023.0812 |
Author | |
Pages | 83-89 |
Date | 01 January 2023 |
Published date | 01 January 2023 |
The opportunity to analyse the principles of the Scots law of agency arises relatively rarely in the Scottish courts. It is therefore very gratifying to see a Scottish sheriff rising to the challenge in order to provide a comprehensive and meticulous analysis of the Scottish authorities. This took place in
Sheriff Reid was surely correct to comment that “[t]he action raises a number of interesting puzzles involving the law of agency”.
The pursuers are a company which supplies mobile advertising space in the form of vans and bikes carrying advertising boards and digital screens. The defenders are a political party registered with the Electoral Commission. The dispute centred around certain invoices issued by the pursuers which they argued had not been paid by the defenders. The defenders refused to pay because, they argued, the expenditure, which had been incurred by candidates, had not been approved in advance in accordance with the Party's internal procedures. The defenders also argued that the contracts with the pursuers engaging the pursuers' services were either void or unenforceable under the Political Parties, Elections and Referendums Act 2000.
Sheriff Reid held that the Party had conferred express authority on candidates, as agents, to bind the Party in contractual obligations with third parties (such as the pursuers). Such authority was limited, however, allowing the candidates to incur expenditure only when the Party's procedures were followed (essentially involving the Party's prior approval of expenditure). Although the candidates lacked express authority in relation to the disputed invoices, the pursuers successfully established that the candidates possessed apparent authority in relation to them. The invoices were therefore payable by the Party.
The Sheriff began his analysis of the law by noting that, as a general rule, agency involves two contracts and three parties: the first contract is an (agency) contract between principal and agent; and the second contract binds the principal and the third party (and is formed through the direct representation of the agent).
…characterised in Scots law as contractual, and more often than not it is indeed constituted by a contract. But it need not be so. The contractual analysis should not be misunderstood as requiring the identification of a contract between principal and agent. Rather, the essential feature of the relationship is consent.
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