THE COMMISSION MERCHANT AT COMMON LAW
| Author | D. J. Hill |
| DOI | http://doi.org/10.1111/j.1468-2230.1968.tb01214.x |
| Published date | 01 November 1968 |
| Date | 01 November 1968 |
THE
COMMISSION MERCHANT
AT
COMMON
LAW
INADEQUACY
OF
AGENCY
LAW
THE
problem
of
the intermediary in commercial transactions is one
that has created difficulties for many centuries in establishing a
suitable legal formula to reflect commercial necessity and the current
pattern
of
economic relationships.' In other wards, the law has found
considerable difficulty in developing separate categories
of
agent,
which although quite distinct in the commercial sense, have no
special provision made for them by the law, and to ascertain the
law that governs them, one is forced back upon the general prin-
ciples of the law of agency which often bear little relevance to the
situation in question. Some categories, such as the broker, have
been recognised as such in both the common law and in
continental law systems, and given a definite legal statup as an
intermediary acting on behalf
of
both parties to
a
contract
of
sale and
purchase in respect of commodities
or
services.a Beyond that,
however, as far as the common law is concerned, there has been
a remarkable degree
of
reluctance to acknowledge that a rigid
division of parties into either
"
principal
"
or
"
agent,"
in
the strict
legal sense
of
the words, does not offer a suitable framework for
many commercial relationships.
Many commercial intermediaries often
do
not
fit
easily into the
simple classification of an
"
agent." Some may, in the legal sense,
be both principal and agent simultaneously, while others through
the complexity of their relationships may prove incapable of being
allocated either status without a grave disregard
of
their true com-
mercial position. Where there has been considerable case-law, as
in the field of estate agency, the law has sometimes responded to the
challenge and classified in some detail the special usages of the trade,
but this has been essentially dependent on a willingness to litigate,
as this provides the only medium
of
legal growth in a case-law
1
Commercial transactions
are
no
reepecter
of
legal jurisdictions and national
boundaries, and it
iR
often only possible to
find
the exact nature
of
a com-
mercial transaction
from
a study
of
practice and law relating to more than
one country. For this reason
a
comparative study
of
the commercial law
of
the Commonwealth countries subject
to
the
common
law
is
long overdue,
and
a
classification
of
combined precedents
in
purely case-law subjects, such
as agency, would certainly be
of
considerable value, bearing in mind the
paucity
of
case-law in individual countries.
The
question ia essentially
a
complementary one to the problem
of
conflict Isms-see Falconbridge,
Conflict
of
l,azus,
Chap.
VIII.
*
See
Bow.rtend
on
Aqe?iq/,
art.
2;
Aincricnn
Restatement,
Agency,
8.
1
(a). Also
note
11
below.
623
624
THE
MODEnN
LAW
REVIEW
VLJI,.
31
~ystem,~ except by statutory provision, which is seldom done.
Where, however, there is a reluctance
to
litigate, as in the field of
commercial salcs, there has been
a
corresponding reluctance to
develop the law into defined channels. Whether this is through a
lack of interest in commerce,
or
a desire to force all relationships
into one
or
other
of
the forms existing at common law, is debatable,
but, whatever the reason, the courts have found the greatest diffi-
culty in achieving a realistic classification
of
the agent in commerce.
Instead there has often been recognition
of
a
particular commercial
usage in an individual case, without any attempt
to
view the problem
in a wider perspective. Accordingly, although it can be argued that
such an approach offers a wide measure of flexibility in trading
relationships, it can equally be said that the development of the
common law has been retarded by the failure of the courts
to
recognise that if a similar custom exists in
a
number
of
markets it
could be incorporated into the law as
a
general principle applicable
in defined circumstances. Flexibility may of course to some extent
be sacrificed, but the gain in certainty, on which businessmen
probably depend to a greater degree, will outweigh any such
theoretical
loss.
It
was only through such an approach in past
centuries that the commercial law of England was gradually built
up from the custom of the
merchant^.^
It
therefore seems unfor-
tunate that the common law which prides itself on flexibility should
have failed to develop to any extcnt in the field of commercial
agency.’
THE
CONTRACT
OF
COMMISSION
:
ANALOGOUS RELATIONSHIPS
By contrast, the less empiric approach of the civil lawyer has
witnessed
a
more logical attitude in the continental civil and
3
“In
common law special legal relations are not
to
be confined within the
strait jacket of definitions;
elrgantia
jurb
may he achieved only at the
expense
of
the dynamic elemcnt in
our
law,”
F.
Je.
Dowrick,
I’
Relation-
ship
of
Principal and Agent
”
(1954)
17 M.L.R.
24,
38.
See
also MeIntyre.
Law
Eelating
to
Airctioneers
and
E&te
Ageiits.
4
Admiltedly
it
can be argued that
the
rule
in
Edie
v.
East
India
Company
(1761)
2
Burr. 1216, that a custom when once incorporated into the common
law cannot
be
changed, has perhaps mitigated against such development,
but it offerfi
no
exc\ise for the virt,ual fossilisation
of
an incomplete agency
structure.
As
Willes
J.
stated, “It is an elementary proposition that
8
custom
of
trade mny control the
mode
of
performance
of
a contract, but
cannot change its intrinsic character,”
Robinson
v.
MoZZctt
(1875)
L.R.
7
H.L.
602.
However, such a proposition should not be interpreted as pre-
cluding
any development
of
the common law by the adoption and absorption
into the body
of
substantive law
of
such cudom.
5
One notable concession to commercial practice, however, is the doctrine
of
the iindisclosed principal, but even this has been a source
of
constant mental
indigestion to
the
acndemic lawyer, and
on
occasions
to
the courts
too.
See
Pollock (1887)
3
L.Q.R.
3.56;
(1896)
12
L.Q.R.
204: (1898)
14
L.Q.R.
2.
Ames,
“
Undificlosed Principal-hie rights and liabilities,”
18
Yale
L.J.
443
;
Cheshire
and
Fifoot,
Contract,
6th ed.;
Armstrong
V.
Stokes
(1872)
7
Q.B.
598,
604,
per
Blackbum
J.
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