(vi) Agency.
Agency is the relationship between two persons, by agreement or otherwise, where one (the agent) may act on behalf of the other (the principal). One consequence is that the principal acquires rights and incurs liabilities under the contract made by the agent on his behalf with third parties, even though the principal is not a party to the contract. Agency is sometimes looked upon as only an apparent exception to the doctrine of privity because in an agency the agent is only the instrument of the principal, who is the real contracting party. This view may be true if the agent acts within his actual authority, but where, for example, the principal's identity is not disclosed, an established agency is a clear exception to the doctrine of privity.
Statutory provisions.
(i) Conveyancing and Property Ordinance (Chap 219).
Section 41 of Chap 219 provides that a covenant is enforceable not only by the parties but also by the convenantee's successors in title, assigns, lessees and mortgagees. Section 26 of Cap 219 provides:.
(ii) Third Parties (Rights against Insurers) Ordinance (Cap 273).
Under Cap 273, a third party may in specified circumstances step into the shoes of the insured and enforce his rights under the policy by suing the insurance company directly. According to section 2, where a person who is insured against liabilities to third parties under a contract of insurance becomes bankrupt, makes a composition or an arrangement with his creditors, or is wound up, his rights under the contract of insurance are transferred to the third party to whom the liability was incurred. In other words, the third party has a direct cause of action against the insurer.
(iii) Marine Insurance Ordinance (Cap 329).
A person with a limited interest in property may insure and recover its full value, holding any amount above his own interest on account for others similarly interested. Section 14(2) of Cap 329 provides that:.
