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BULAW5914 Commerical Law

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1: Rodney and Penelope live together as domestic partners in a de facto relationship. Each week Rodney orders groceries online and receives a delivery of groceries from the local TN supermarket where Penelope holds a credit account is known to regularly pay outamountsput on that account for the groceries that Rodneyorders. Penelope has asked Rodney not to order expensive or luxury items without Penelope first agreeing. Last week Rodney placedtwo separate orders:he orders a $2,500 high-end microwave oven and weekly groceries. If Rodney had asked about the microwave oven Penelope would never have agreed to its purchase. When the account arrives for payment, Penelope refuses to pay on the ground that Rodney had no authority to commit to Penelope’s credit account liability for the microwave oven. However, after speaking with Rodney, Penelope subsequently agrees to both transactions and pays for both. Consider the legal issues arising in agency from this scenario.

2: MODO, a livestock supplies company, was considering opening an office in Ararat. Tim is an office assistant for MODO. Tim was instructed to visit Ararat, make enquiries on retail locations available to let and then report back to head office with a recommendation. When Tim arrived in Ararat, he evaluated retail premisesand made enquires on retail locations and in his excitement he executed on behalf of MODO a written lease arrangement with Adam. When the copy of the executed lease arrives via email at MODO headquarters in Adelaide, MODO refuses to agree to the lease of the premises and so Adam takes legal action against MODO. Identify the legal issues arising in agency from this scenario. 

3: Discuss the role of apparent authority toboth establishing:

(a) the existence of the principal-agent relationship, and;

(b) the scope of the agent’s power to bind the principal with third parties. 

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