Offeror’s death, and accepts the offer in ignorance, then the acceptance is valid provided the contract is not for provision of personal service. General view is that the offer comes to an end because offeree’s personal representatives cannot purport to accept the offer is called offeree’s death.
Misrepresentation concerns in the case of Lambert v Co-op Insurance Society Ltd (1975). It is an example of the operation of a positive duty of good faith in contracts for insurance. Mrs Lambert signed a proposal form for ‘ All Risks’ insurance over her husband’s jewelry, without mentioning her husband was convicted previously of receiving 1730 stolen cigarettes and was fined 25 pounds. The Co-op issued the policy. Mrs Lambert was convicted of two more dishonesty offences in 1971`and sentenced to 15 months jail. Mrs Lambert did not reveal this either when the policy was renewed in 1972.
In April 1972 some items worth 311 pounds were lost or stolen and the Co-op refused on the basis of a failure to disclose. This trial was done by High Court. Mackenna J held ‘the assured is under a duty of disclosure… extent of the matter in controversy.’ You could have a duty to disclose everything you think is material, everything a reasonable person think is, everything the particular insurer think is, or everything a reasonable or prudent insurer think is, like in sec 18 Marine Insurance Act 1906.
Because there is no difference between this insurance and marine insurance in principle, it should be the latter. He did however say the law was unsatisfactory and the Co-op were doing ‘a heartless thing… but that is their business, not mine’. In Peter Pan Manufacturing Corp Ltd v Corsets Silhouette Ltd (1963) the agent used the principal’s confidential information to make a profit for himself.
In both cases, the court held the agent liable to account for the profit made. There are three duties of the principal. The first one is duty to remunerate. This may take the form of a commission. If this is not expressly provided, the agent maybe entitled to remuneration on a “quantum meruit” basis.
The second duty indemnify. The agent entitled to be indemnified for the expenses and liabilities he has incurred in performing his duties this right does not apply if the agent exceeds his authority. The third duty is the right of lien. If the agent has yet to be paid, and has in his possession goods or chattels belonging to his principal, a right of lien may arise.
This right enables the agent to retain such property until payment is made. Relationship between the principal and the third party is; if A has disclosed to T the existence / name of P or if T is aware that A is acting for P; and A acts within his authority, then P is bound by the contract with the third party.
If A has not disclosed the existence of P, and A is acting within his authority, and T thinks that A is principal when A is in fact contracting as agent: then the result maybe a contract arises between T and P or a contract arises between T and A. T may choose to hold A liable, or P liable after discovering P’s existence. T must make a choice but he cannot hold both liable. An election once made is final.
The undisclosed P is generally also entitled to enforce the contract against T, subject to the following exceptions are; personality of A is important to T. Identity of the contracting party with whom T was contracting with is a material ingredient of the contract. If A has not acted within his authority: the undisclosed P cannot enforce the contract against T, because P is not a party to the unauthorised contract. The undisclosed P cannot even ratify the unauthorised contract because to ratify, A must be expressly contracting as P’s agent-Keighley, Maxsted and Durant (1901).
