Commercial Law Work Example.

996 Words Mar 20th, 2011 4 Pages
Question 1

The UK Rail vs. Smithfileld case is a striking example of the term – Agency of Necessity. This is the case when, in certain circumstances, the agent is allowed by law to take actions on behalf of the principal without the will, knowledge or any other representation of the principal. However, certain requirements have to be met, in order for the agent to claim that it acted out of necessity: 1) the actions have been taken for the reason of compelling emergency; 2) impossibility of communication; and 3) interests of the principal (to be genuinely judged by the agency). The first test to be passed by an agent is the necessity to take salvage actions. In cases of an emergency or a consequential necessity,
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The solicitor, in the face of Smithers, won’t be directly influenced by this agreement, as it doesn’t participate in it. However, creditors can be bound with the firm by a tripartite contract between the continuing partner (constituted as a new firm), retiring members and the third party added to it. All three participants make an agreement on the newly formed firm, to which all the liabilities will be implied. This process of indemnity would let the leaving partners to become free of any obligations. Has to be noticed that this process depends on the relationships and duties between all three partners, whether Homer (remaining employer) wants to cover the costs by himself with respect to those retiring, or not.

Anyways, it is essential that the outgoing members of the partnership do discuss this possibility with the last worker, and provide an official notice of retirement, in order to prevent future debts (as stated in Section 36 of Act 1980: “Where a person deals with a firm after a change in its constitution he is entitled to treat all apparent members of the old firm
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