66 66 not what it would have cost the defendant to perform the contract (). The presumption, in all cases, is against the wrongdoer. "Every reasonable presumption may be "made as to the benefit which the other party might "have obtained by the bona fide performance of the agreement" (a). At the same time, generally speaking, damages are restricted to the proximate consequences of the breach of contract. The rules on this point are commonly referred to as "the rules in Hadley v. “Baxendale ”(b), which may be regarded as the leading case on the subject, though the principles laid down in it. have been elucidated in many more important recent decisions. The general rule was thus expressed in the leading case: The damages in respect of a contract "should be either such as fairly and reasonably may be "considered as arising naturally, that is, according to the "usual course of things, from such breach of contract; or “such as may reasonably be supposed to have been in the contemplation of both parties at the time they made "the contract, as the probable result of such breach" (c). It follows that damages immediately and directly arising from the breach are always recoverable (d). But special damages, arising from some special circumstances peculiar to the case, are not recoverable unless the party who is sought to be made liable had, at the time of contracting, notice of, and expressly or implicitly contracted on the basis of, such special circumstances. "In order that the 66 notice may have any effect, it must be given under such "circumstances as that an actual contract arises on the part of the defendant to bear the exceptional loss" (e). (B) Action for specific performance. This is an equitable remedy; but, under the Judicature Act, 1873, s. 24, 66 (z) Conquest v. Ebbetts, [1896] A. C. 490. (a) Lord SELBORNE, L.C., in Wilson v. Northampton Rail. Co. (1874), L. R. 9 Ch. 286. (b) (1854), 9 Exch. 341. (c) Ibid. (d) Ashworth v. Wells (1898), 78 L. T. 136; MacMahon v. Field (1881), 7 Q. B. D. 591. (e) Horne v. Midland Rail. Co. (1873), L. R. 8 C. P. 131; Agius v. Great Western Coll. Co., [1899] 1 Q. B. 413. can now be given in all divisions of the High Court. The remedy is still, however, only available on equitable principles, and is not therefore granted where the ordinary remedy by action for damages is available and adequave. For instance, specific performance will not be ordered of a contract to lend money (ƒ) or for personal services (g) or of any contract of which, on the ground of hardship, uncertainty in ability to enforce it, or otherwise, the Court of Chancery would not formerly have decreed specific performance (h). With regard to contracts for the sale of goods, the power to grant specific performance is expressly conferred by the Sale of Goods Act, 1893, s. 52; but the jurisdiction is exercised only in exceptional cases. An (c) Injunction.-Where a contract involves a negative obligation, the court will, in a proper case, restrain a breach of it by an injunction, violation of which will expose the party to committal for contempt of court. injunction will be granted where the contract contains a negative stipulation in express terms (), and apparently now also where the contract, although affirmative in form, is negative in substance (k). - (D) Other remedies. There are various other subsidiary remedies applicable to special classes of contracts, eg, the right of a seller of goods to re-sell and to stop in transitu, and the right of lien which is given to sellers, carriers, innkeepers, etc. These are dealt with elsewhere in this work. (f) South African Territories v. Wallington, [1898] A. C. 308. (g) Ryan v. Mutual Tontine Association, [1893] 1 Ch. 116. (h) Hope v. Walter, [1900] 1 Ch. 257; Wheatley v. Westminster Coal Co. (1870), L. R. 9 Eq. 538. (1) Whitwood Chemical Co. v. Hardman, [1891] 2 Ch. 416; (k) Metropolitan Electric Supply v. Ginder, [1901] 2 Ch. 799; Manchester Ship Canal Co. v. Manchester Racecourse Co., [1901] 2 Ch. 37. S.C.-U. H CHAPTER V.-SECTION II. THE CONTRACT OF AGENCY. General nature and modes of formation.-The importance of the contract of agency lies in the fact that it is ancillary to every other class of contract. Any person may enter into any kind of contract by means of an agent acting with his authority; and the effect is, speaking generally, precisely the same as if he had personally been a party to the agreement. In order to be valid as between the principal and the agent, the contract for the agency must conform to the ordinary rules applicable to all other contracts. No particular form is necessary. But an authority to an agent to execute a deed must itself be given by a deed, which is commonly called a power of attorney. Agency is usually created by express agreement; but it may also arise by implication from the circumstances and conduct of the parties. For instance, if one person sends goods to an auctioneer or factor, whose business it is to sell goods, he is presumed to authorise a sale of them (a). Agency is sometimes implied by law from the relation of the parties, as in the cases of husband and wife (b), and partners (c). It may also be presumed from the necessity of the occasion, as in the case of the master of a ship, who has implied authority to pledge the shipowner's credit (a) Pole V. Leask (1864), 33 L. J. Ch. 155; Henderson v. Williams, [1895] 1 Q. B. 521. (b) See above, p. 72. 66 for the necessary means to prosecute the voyage (d). Although a person who purports to contract as agent for a principal, without actual authority, cannot bind the principal without his consent, yet the principal may, by a subsequent ratification, become bound by and entitled to the benefit of the contract. Such a ratification dates back to the original making of the contract, and its effect is precisely the same as if the agent had been authorised to contract originally, in accordance with the principle " omnis ratihabitic retrotrahitur ac mandato priori æquiparatur” (e). In order, however, that a ratification may be effectual, the following conditions must concur, i.e., (1) the agent must contract as agent for a principal who is in contemplation, and in actual existence, at the time of the contract (ƒ); (2) the contract must be such as the principal was at the time legally capable of entering into (g) ; (3) the principal must, at the time of ratification, have full knowledge of all material facts relating to the contract ratified, or else he must intend the ratification to take effect whatever the facts were, and in spite of his ignorance as to them (h). Kinds of agents.-Agents may be divided into two principal classes: (1) general agents and (2) particular or special agents. A general agent is one appointed for a general class of acts, or to fill an employment or position involving transactions of various kinds within the general scope of a certain business, e.g., the manager of a shop or factory, the superintendent of a railway, or the managing director of a company, etc. A particular or special agent (d) The Heinrich Bjorn (1886), L. R. 11 App. Ca. 270; The Savona, [1900] P. 252; and see, generally, Gwilliam v. Twist, [1895] 2 Q. B. 84. (e) Bolton v. Lambert (1889), 41 Ch. D. 295; Dibbins v. Dibbins, [1896] 2 Ch. 348; In re Tiedemann, [1899] 2 Q. B. 66. (f) Keighley v. Durant, [1901] A. C. 240; Kelner v. Baxter (1866), L. R. 2 C. P. 174; Brook v. Hook (1871), L. R. 6 Ex. 89. (g) Ex parte Badman and Bosanquet (1890), 45 Ch. D. 16. (h) Marsh v. Joseph, [1897] 1 Ch. 213; Banque Jacques Cartier v. Banque d'Epargne (1888), L. R. 13 App. Ca. 111. on the other hand, is one appointed for a particular occasion or purpose only. The important difference between the two cases is with regard to the position of third persons with whom they deal. Such third persons are only concerned with the apparent and not the actual authority of an agent. Therefore if a general agent, purporting to act on behalf of his principal, enters into a contract within the apparent scope of his employment, his principal is bound by the contract, notwithstanding any express limitation of the agent's authority, which is unknown to the third party with whom he has contracted (¿). But, in the case of a particular agent, a third party contracting with him does so at his own peril, unless he previously ascertains the exact extent of the agent's authority (k). There are certain kinds of general agents to whom distinctive names are applied. The following are the chief instances. Factors, who are agents to whom goods are entrusted, with a discretionary power of sale. Special provisions with regard to them are contained in the Factors Act, 1889 (1). Brokers, who are agents employed to buy and sell goods or other property, but not, as in the case of factors, having possession of the goods. Their authority is merely to negotiate and superintend the making of a bargain between two other persons (m). A broker employed in a particular trade or market has implied authority to contract according to the usages of the trade or place; e.g., a stockbroker is implicitly authorised to act according to the rules of the Stock Exchange (n). Commission agents, who are agents employed to buy or (i) Watteau v. Fenwick, [1893] 1 Q. B. 346; Reid v. Rigby, [1894] 2 Q. B. 40; Wright v. Glyn, [1902] 1 K. B. 745. (k) Brady v. Todd (1861), 9 C. B. (N.S.) 592; Bryant v. La Banque du Peuple, [1893] A. C. 170; Jacobs v. Morris, [1902]1 Ch. 816. (7) See p. 114: Hastings v. Pearson, [1893] 1 Q. B. 62. (m) Blackburn, Contract of Sale, p. 81. (n) Levitt v. Hamblet, [1901] 2 K. B. 53; Sutton v. Tatham (1839), 10 A. & E. 27. |
