UNIVERSITI TEKNOLOGI MARA (UiTM)

CAWANGAN KEDAH, KAMPUS MERBOK

ASSIGNMENT
BUSINESS LAW (LAW299)
PERCENTAGE: 20%
SEMESTER FEBRUARY – JULY 2020 (COVID19)

Question

Ahmad, a farmer in Kedah, instructed Ramli, who ran a transportation service, to

deliver some vegetables to Pahang. When the lorry arrived at Kuala Kubu Baru,
there were landslides and also flood which caused the road to be closed and not
accessible by any transport. Ramli, thinking that the weather will get worse, decided
to sell the vegetables at Pasar Malam Jalan Raya before the condition of the goods
worsened. Ahmad is upset with the decision made by Ramli and wants to sue for his
losses.

Advise Ahmad

ANSWER:

ISSUE: Whether Ahmad can sue Ramli for the loss.

LAW : Section 135 of the Contract Act 1950-

 Agent is a person employed to do any act for another or represent

another in dealing with third party.
 Principle is a person for whom such act is done,or who is represented.
 Agency is a relationship which subsists between the principle and the
agent.

Section 142 of the Contract Act 1950 provide that, “An agent has authority in an
emergency to do all such acts for the purpose of protecting his principle from loss as
would be done by a person of ordinary prudence, in his own case under similar
circumstances.

Agent by necessity means a person may become the agent of another without being
appointed as such under certain circumstances.

In commercial transaction,when a person is entrusted with another’s property and it

become necessary to act to preserve that property although he has no authority to
do so.

Condition to Create Agency by Necessity.

(a) There must be real & actual emergency

Case: Great Northern Railway Co v Swaffield (1874)

Facts: The railway company carried the defendant’s horse to its destination. On
arrival there was no one to meet. Since the station master did not know the
defendant or his agent’s address, he instructed that the horse to be put in the stable.
Later, the railway company claimed for the chargers for the stable from the
defendant. However, the defendant refuse to pay.

Held: The plaintiff (i.e. the railway station company) had acted as an agent of
necessity in this matter. Therefore, the claim was successful.

(b) Impossible to get the principal’s instructions.

Case: Springer v Great Western Railway Company (1921)

Facts: Defendant agreed to carry plaintiff’s tomatoes to convent garden market.

Defendant’s employees were on strike so they uploaded the tomatoes. Some of the
tomatoes were found bad. The defendant decides to sell the tomatoes locally
because they believe that the tomatoes were not in saleable condition when arrived
at the convent garden market. However, they do not tell the plaintiff about the
decision . Then the plaintiff claimed damaged based on the marker price of the
tomatoes in convent garden market.

Held: The plaintiff was entitled to damages because the defendant was not an agent
of necessity. This is because they failed to communicate with the plaintiff when they
could have done so.

APPLICATION: In this case Ahmad had appointed Ramli and entrusted deliver the
vegetable to Pahang. By virtual of Section 135 of Contract Act ,the contract of
agency is actually exist. In the meantime under Section 142 of section of Contract
Act it clearly state that the agent has the authority in an emergency to do all such as
acts for the purpose of protecting his principle from loss as would be done by a
person of ordinary prudence,in his own case under similar circumstances.In
additional to that in the commercial transaction ,when a person is entrusted with
another property and it become necessary to act to preserve that property although
he has no authority to do so.
Applying this 2 section into the current situation Ramli had the authority to sell the
vegetable at Pasar Malam in order to prevent Ahmad from loss as there are
possibility that the vegetable might got rotten and bad because of the landslide.This
can consider an emergency state.
In the case of Great Northen Railway Co v Swaffield (1874) the plaintiff (i.e the
railway station company) had acted as an agent of necessity by placing the horse at
the stable as here was no agent or person in charge waiting at the arrival points,to
hand over the horse.There is the real & actual emergency.
In the case Springer v Great Western Company (1921) defendant is not prevented to
get the new instruction from the plaintiff and willingly choose not to contact the
plaintiff for the new instruction himself.Therefore it is not imposibble to get the
principle instruction.Hence the court held that the plaintiff is succed in his claim as
the defendant was not an agent of necessity.

CONCLUSION: Therefore in this case, Ahmad cannot Sue Ramli for the loss and
damage as Ramli had become agent by necessity as there are real & actual
emergency and it is impossible to get Ahmad instruction as the principle due to the
landslide. In additional Ramli had done all by his mean to prevent Ahmad from
suffering lost.