9.4 Creation of agency

1. Express Agreement

The agreement should outline the terms, scope of authority, responsibilities, and duties of the agent.

The express agreement can be written, oral, or implied from the conduct of the parties. However, a written agreement is often recommended for clarity and enforceability.

2. Estoppel

In the context of the law of agency, a person who is under a legal duty to inform a third party that the person purporting to act for him as his agent is in fact not his agent but fails to do so may be “stopped” from denying that the apparent agent is actually his agent.

For estoppel to apply:

1. The third party must have relied on the presentation ii. Change in the legal position as a result of the reliance iii. It would be inequitable to a 3^rd party if the agency is not presumed.
2. Ratification

It occurs when a person (the principal) approves or accepts the actions of another person (the agent) after those actions have already been taken on their behalf.

The principal ratifies the agent’s actions, essentially confirming the agency relationship and accepting the consequences of the agent’s actions.

Agency by ratification can only arise if;-

1. The agent purported to act for a principal
2. The alleged principal was in existence at the time of contracting.
3. The principal had capacity to enter into the contract.
4. The contract to be ratified is lawful.
5. The agent must have disclosed the principal and the disclosed principal is the same one adopting the contract.
6. The alleged principal must have been made aware of all the material facts of the relevant transaction before he decided to adopt the contract. If the apparent ratification is obtained by a partial disclosure of relevant facts then it has no legal effect.
7. The contract must be ratified within a reasonable time
8. Necessity

In cases of emergency or necessity, an agency relationship may be created based on the principle of necessity. When there is a pressing need for someone to act on behalf of another party, a person may step in as an agent to address the urgent situation.