A dealer may for some ad hoc purpose be the agent of a finance company. In relation to a purchase of a motor vehicle through a motor dealer, where the prospective purchaser completes an application for hire purchase in the office of the motor dealer, he forwards it to the finance company for approval, and if approved, the dealer delivers the motor vehicle to the customer. The finance company provides the purchase price to the motor dealer and the customer pays periodic payments to the finance company. The dealer is not acting as an agent of the finance company, merely arranging a finance application to be made by a prospective customer. If the dealer forwarded the finance application to a finance broker, the broker would be acting on behalf of the prospective customer.
Lord Wilberforce said that while in all hire purchase cases much must depend on the individual facts ‘such questions as arise of the vicarious responsibility of finance companies for the acts or defaults of dealers cannot be resolved without reference to the general mercantile structure within which they arise, or if one prefers the expression, to commercial reality.’
After citing Lord Pearson in Garnac, he went on: ‘The significant words for the present purpose are ‘if they have agreed to what amounts in law to such a relationship’These I understand as pointing to the fact that while agency must derive from consent, the consent need not necessarily be to the relationship of principal and agency itself (indeed the existence of it may be denied) but may be to a state of facts on which the law imposes the consequences which results from Agency. It is consensual not contractual. So interpreted this formulation allows the establishment of an agency relationship in such cases as the present.’
Lord Upjohn (with whom Lord Guest Agreed) considered that the acts of holding stock of Worcester’s formes of hire purchase agreement, filling them in with particulars including Worcester’s charges, having a prospective hirer sign the documents, and forwarding the forms to Worcester, showed that Raven was assisting the proposed hirer but did not establish that it had actual or apparent authority from the financier.
Judges:
Lord Morris of Borth-y-Gest, Lord Wilberforce, Lord Reid, Lord Upjohn
Citations:
[1969] 1 AC 552
Statutes:
Jurisdiction:
England and Wales
Citing:
Approved – Mercantile Credit Co Ltd v Hamblin CA 1964
Pearson LJ said: ‘There is no rule of law that in a hire purchase transaction the dealer never is, or always is, acting as agent for the finance company or as agent for the customer.Nevertheless, the dealer is to some extent an intermediary between . .
Cited – Garnac Grain Co Inc v HMF Faure and Fairclough PC 1967
The Board was asked what was necessary to establish the raltionship of principal and agent.
Held: In the essence of agency is the element of consent.
Where there is an available market for the goods, the market price is determined as at . .
Cited by:
Cited – Norman Hudson v Shogun Finance Ltd CA 28-Jun-2001
A rogue had purchased a car, using a false name to obtain finance. He had then sold it to the defendant. The finance company claimed the car back.
Held: The dealer had not taken all the steps he might have done to check the identity of the . .
Cited – Anglo Group Plc, Winther Brown and Co Ltd v Winter Brown and Co Ltd, BML (Office Computers) Ltd, Anglo Group Plc, BML (Office Computers) Ltd TCC 8-Mar-2000
Contract – Contract for provision of computer services – purchaser contract with finance company – duty of co-operation to be implied in computer contracts – practice – responsibilities of expert witnesses generally – whether computer company liable . .
Lists of cited by and citing cases may be incomplete.
Agency, Contract
Updated: 29 April 2022; Ref: scu.188419