Class Presentation by Warwick Kelly

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Agency and Apparent Authority(Freeman and
Lockyer v Buckhurst Park Properties Ltd)
Class Presentation by Warwick Kelly Monday 30
August 2004 UNSW Student 3120991
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Freeman and Lockyer v Buckhurst Park Properties
Ltd 1964 QB 480
Buckhurst Park Properties Ltd (Principal)
Kapoor (Agent)
Freeman Lockyer (Third Party)

• Director of Buckhurst Park Properties Ltd
• Had authority to manage
• Instructed Freeman Lockyer to prepare
  development plans for new estate

• Architects and surveyors
• Carried out work on the assumption that Kapoor
  had authority to act as agent for Buckhurst Park
• Sued Buckhurst Park for payment of fees

• Property development company knew Kapoor was
  acting as MD
• Attempted to deny that Kapoor was authorised to
  enter into agreement with Freeman on behalf of
  Buckhurst

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Freeman v Buckhurst Park Implications for Legal
Relationships
AGENT
THIRD PARTY
PRINCIPAL
Kapoor
Freeman Lockyer
Buckhurst Park
No Legal Relationship agent represents that he
acts for the principal
Actual Authority legal relationship between
principal and agent
Third party is a stranger to this relationship
Apparent Authority legal relationship between
principal and third party - created by a
representation that the agent has authority to
act on behalf of the principal
Agent is a stranger to this relationship
In the judgment Diplock LJ held that the contract
between Buckhurst Park and Freeman was vaild even
though it could not be shown that the Buckhurst
board had conferred authority on Kapoor to enter
into contracts on behalf of Buckhurst. Apparent
authority was sufficient for contract to be valid.
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Significance of Freeman v Buckhurst Park
Important to differentiate between actual and
apparent authority third parties normally
rely on the apparent authority when entering into
contracts with a principal (generally, they have
no way of knowing actual authority and have to
rely on what the agent tells them)
Actual
Apparent
If agent enters into a contract (within the scope
of actual authority) it does create contractual
rights and liabilities between the principal and
the third party. The representation acts as
estoppel, preventing the principal from asserting
that he is not bound by the contract
Representation which creates apparent authority
may arise from agents conduct. By permitting the
agent to act in a way in which it appears the
agent has authority, the principal is legally
bound by any contract regardless of whether the
agent has actual authority to enter into the
contract.
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Agency - Four Conditions for Apparent Authority
The four conditions which must be fulfilled in
order for a contractor to enforce against a
company a contract entered into on behalf of the
company by an agent who had no actual authority
to do so, are

• Representation made to contractor that agent had
  authority to enter into contract on behalf of
  the company of the kind sought to be enforced
  and
• Such representation made by a person having
  actual authority to manage with respect to the
  matters covered by the contract and
• Contractor induced by the representation to enter
  into the contract and
• Companies memorandum or articles of association
  does not explicitly prohibit contract of the kind
  sought or prohibit delegation of authority to the
  agent.

from the ratio decidendi by Diplock LJ Freeman
and Lockyer v Buckhurst Park Properties Ltd
1964 QB 480
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