- Agent's duties and liabilities — Authority of agent — Breach of warranty of authority — Principal’s liabilities — Ratification — Contract clauses and damages
This chapter discusses the agent’s privilege to incur personal liability to the third party if he acts without. It explains the action for breach of warranty of authority that lie whenever the agent represents to a third party that he has authority to act on behalf of a principal. It also describes an agent who has apparent authority to act that may still be held liable on his warranty of authority as he is still falsely promising that he has actual authority. The chapter recounts the case of Rainbow v Howkins wherein an auctioneer mistakenly knocked down a horse to a bidder at a price below the reserve set by the principal. It refers to the breach of warranty of authority, which can occur irrespective of whether the agent was at fault in maintaining that he had authority to act.
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