University of Belize

Business Law Class

Adjunct Lecturer: Rondine Twist

Contracts Handout No. 5 – Remedies & Agency

1) Remedies or breach
2) Agency

1) Remedies for breach of contract

a. Breach of condition or warranty?

b. Anticipatory breach – one party pulls out before his performance is due. The other side
may repudiate and then sue for damages.

c. Actual breach of contract – failure to perform, or inadequate performance

d. Damages – to compensate the injured party for loss arising from the breach. Courts try and
out the injured party in the position he/she would have been had the contract been
performed. However certain damages may be too remote to blame the defendant.

i. Remoteness of damage- Usual damage and non-usual damage.

1. Usual damages – damage that anyone might reasonable expect (e.g.
breakage in transport)
2. Non-usual damage – a particular situation not necessarily known to the
other party (e.g. failure to disclose that time is crucial).

ii. Quantum of damages (financial value of the claimant’s loss)

1. Loss must be financially quantifiable
2. Agreed damages will not be altered but penalties may apply (punitative
damages)
3. The injured party has a duty to mitigate loss (cannot claim damages which
could have been avoided)
4. Contributory negligence may reduce the amount of damages (where the
claimant’s lack of care added to the damages)

iii. Liquidated damages – a contract provision that lays out the sums to be paid in
damaged in the case of breach

e. Equitable remedies: discretionary remedy offered by the court if damages will not be
appropriate or if the party claiming the remedy acted honestly.
i. Recession – return the parties to their original position had the damage not
occurred.

ii. Specific performance – The court orders a party to perform his contractual
obligations. Mostly in relation to land.

iii. Injunction – orders a person to do or not do something.

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University of Belize
Business Law Class
Adjunct Lecturer: Rondine Twist

2) Agency

The law of agency deals relationships that involve a person, called the agent, who is authorized to
act on behalf of another (called the principal) to create legal relations with a third party.

A fiduciary relationship where one person places complete confidence in another regarding a
particular transaction or general affairs or business.

The principal, expressly or implicitly, authorizes the agent to work under his or her control and on
his or her behalf.
 Expressed authority – power is derived from the principal’s explicit directions.
 Implied authority – The Principal is deemed to have implicitly given the agent authority to
do anything incidental to perform the directions.

The agent negotiates on behalf of the principal or enters into contractual relationship with third
parties on behalf of the principal.

 An written agency relationship is most commonly created by a formal deed know as a power
of attorney.
 An agency relationship can be informal by conduct, mostly between friends.
 An agency relationship may arise by implication- commonly among employer and
employees.

Examples in your text:

1. Real estate agents, auctioneers, brokers
2. Your friend asks you to buy a sandwich for her – you are her agent.
3. Lap dancers are not agents for the club owner.
4. If you send someone to buy goods as your agent, and they overspend, the shop owner
can collect all sum due from you.

Agency by estoppel – a 3rd party assumes that a person is acting as agent for another because of the
principal’s behavior; and in such instance, the 3rd party can enforce the contract against the principal
even if no agency relationship was present. (eg. Divorced couple but wife still uses credit card of ex
husband).

Agency arising from necessity (one person controls the other’s property and has to protect it in an
emergency).
Agency by ratification

Disclosed principal
Undisclosed principal

Rights of the Agent:

 To get paid (if the agency agreement indicates such intention)
 To indemnity – to recover expenses incurred and losses suffered if the sufficiently incidental
to the agent’s authorized conduct.

Duties of the Agent:

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University of Belize
Business Law Class
Adjunct Lecturer: Rondine Twist

 Performance – carry out the Principal’s orders

 Perform duties with Reasonable care and skill
 Accountability for the profits and to transfer the profits to the principal
 Avoidance of conflict of interest – must not exploit the relationship for your own benefit.

Principal is liable to 3rd parties under contracts and torts.

Termination of agency: by law or by acts of the parties:

1. Death of either
2. Mental incapacity of either party
3. Bankruptcy of either party
4. Frustration
5. Short term agency ends
6. Agreement
7. Revocation