Did Choo have authority to execute the management agreement?
• A third party (often referred to as the contractor) dealing with an agent can hold the principal of the agent liable for the acts of the agent with the third party if the third party can establish: • the agent had actual authority from the principal to act on his behalf; • or that the agent had apparent or ostensible authority to do so – see Halsbury’s Laws of England, 4th Edn, Vol I, p 2, paragraph 135. • “Actual authority” is described by Lord Diplock in Freeman & Lockyer v Buckhurst Park Properties (Mongol) Ltd [1964] 1 All ER 630 at p 644 as: a legal relationship between the principal and agent created by consensual agreement to which they alone are the parties. Its scope is to be ascertained applying ordinary principles of construction of the contracts, including any proper implications from the express words used, the usage of trade, or the course of business between the parties. To this agreement the contractor is a stranger; he may be totally ignorant of the existence of any
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