Agency law and the statutor

             CAPACITY TO ACT AS PRINCIPAL AND AGENT.
             It is said that only those persons who have full contractual capacity may hire an agent i.e. the principals themselves. On the other hand agents can be employed even if they do not have full contractual capacity and can employ the rights and privileges given to them through the contractual agreement and these cannot under any circumstances exceed the powers of the principal. .
             THE AGENTS AUTHORITY IN REGARD TO COMMERCIAL TRANSACTIONS.
             It is always imperative to determine the agent's authority. The authority of the agent may be:.
             Actual authority: which as explained by Diplock in Freeman and Lockyer v Buckhurst Properties (Mangal) Ltd [1964] 2 QB 480 at 502-503 (Turner,Pg 221,2003) is as follows:.
             " An actual authority is a legal relationship between principal and agent created by a consensual agreement to which they alone are parties. Its scope is to be ascertained by applying ordinary principles of construction of contracts including any proper implications from the express words used, the usages 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 authority on the part of the agent. Nevertheless if the agent does enter into a contract pursuant to the actual' authority, it does create contractual rights and liabilities between the principal and the contractor."".
             Apparent or Ostensible Authority: Diplock in Freeman and Lockyer v Buckhurst Properties (Mangal) Ltd [1964] 2 QB 480 at 503 (Turner,Pg 222,2003) has said of this type of agents authority:.
             "An apparent or ostensible authority on the other hand is a legal relationship between the principal and the contractor created by representation made by the principal to the contractor intended to be and in fact acted upon by the contractor, that the agent has authority to enter on behalf of the principal into a contract of the kind within the scope of the apparent' authority, so as to render the principal liable to perform any obligations imposed upon him by such a contract.