(Agency Law)

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Issue

Rule

Analysis - Relevant Cases

Conclusion

Ally appointed Zoe to run her (Ally's) cafe. Ally told Zoe not to buy bread from the Casamia bakery, because the bread is of low quality. On a friendly visit by Lesley, the manager from Casamia Bakery at the cafe, Zoe ordered 500.00 worth of bread from Lesley, to sell at the cafe. The bread was popular with the customers initially and so Ally agreed to Zoe's purchase. However, three days later, all the remaining bread was spoilt, and Ally incurred a loss of 300.00. Ally was very unhappy with the turn of events. Advise Ally, based on the law of agency, on the following:

(a) Assuming Lesley has yet to be paid, is Ally bound by the agreement between Zoe and Lesley? (50 marks)

(b) Ally later found out that Zoe had obtained from Lesley a personal gift in the form of a cash voucher worth 100.00 as an incentive for her to buy the bread for the store. What action(s) can Ally take? Give reasons for your answer.

Required Format

Issue

Rule

Analysis - Relevant Cases

Conclusion