CAP. 149.
CHAPTER 149 OF THE LAWS
1959 EDITION
PRINTED BY
C. F. ROWORTH LIMITED, 54,
[Appointed by the Government of
[1st January, 1931.]
1949 Cap. 192. 25 of 53. 7 of 56
To amend and consolidate the Law
relating to Contract.
Short title.
1. This Law may be cited as the Contract Law.
General rule of construction of Law.
(1) This Law shall be interpreted in accordance
the principles of legal interpretation obtaining in England, and expressions
used in it shall be presumed, so far as is consistent with their context, and
except as may be otherwise expressly provided, to be used with the meaning
attaching to them in English law and shall be construed in accordance
therewith.
Interpretation.
(2) In this Law the following words and
expressions are used in the following senses, unless a contrary intention
appears from the context-
(a) when one person signifies
to another his willingness to do or to abstain from doing anything, with a view
to obtaining the assent of that other to such act or abstinence, he is said to
make a proposal;
(b) when the person to whom
the proposal is made signifies his assent thereto, the proposal is said to be
accepted. A proposal, when accepted, becomes a promise;
(c) the person making the
proposal is called the "promisor," and the
person accepting the proposal is called the "promisee";
(d) when, at the desire of the promisor,
the promisee or any other person has done or
abstained from doing, or does or abstains from doing, or promises to do or to
abstain from doing, something, such act or abstinence or promise is called a
consideration for the promise;
(e) every promise and every
act of promises, forming the consideration for each other, is an agreement;
(f) promises which form the
consideration or part of the consideration for each other are called reciprocal
promises;
(g) an agreement not enforceable
by law is said to be void;
(h) an agreement
enforceable by law is a contract;
(i) an agreement which is
enforceable by law at the option of one or more of the parties thereto, but not
at the option of the other or others, is a voidable
contract;
(j) a contract which
ceases to be enforceable by law becomes void when it ceases to be enforceable.
(3) "representatives" means the persons who by operation of
law succeed to the property of a deceased person.
Communication, acceptance and revocation of proposals.
3. The communication of proposals, the
acceptance of proposals, and the revocation of proposals and acceptances,
respectively, are deemed to be made by any act or omission of the party
proposing, accepting or revoking by which he intends to communicate such
proposal, acceptance or revocation, or which has the effect of communicating
it.
Communication, when complete.
(1) The communication of a proposal is complete
when it comes to the knowledge of the person to whom it is made.
(2) The communication of an acceptance is
complete-
(a) as against the proposer, when it is put in a course of transmission to
him, so as to be out of the power of the acceptor;
(b) as against the
acceptor, when it comes to the knowledge of the proposer.
(3) The communication of
a revocation is complete-
(a) as against the person who makes it, when it
is put into a course of transmission to the person to whom it is made, so as to
be out of the power of the person who makes it;
(b) as against the
person to whom it is made, when it comes to his knowledge.
Revocation of proposals and acceptances.
An acceptance may
be revoked at any time before the communication of the acceptance is complete
as against the acceptor, but not afterwards.
Revocation,
how made.
(a) by the communication
of notice of revocation by the proposer to the other
party;
(b) by the lapse of the
time prescribed in such proposal for its acceptance, or, if no time is so
prescribed, by the lapse of a reasonable time, without communication of the
acceptance;
(c) by the failure of
the acceptor to fulfil a condition precedent to
acceptance; or
(d) by the death or
insanity of the proposer, if the fact of his death or
insanity comes to the knowledge of the acceptor before acceptance.
(a) be absolute and
unqualified;
(b) be expressed in some
usual and reasonable manner, unless the proposal prescribes the manner in which
it is to be accepted. If the proposal prescribes a manner in which it is to be
accepted, and the acceptance is not made in such manner, the proposer may, within a reasonable time after the acceptance
is communicated to him, insist that his proposal shall be accepted in the
prescribed manner, and not otherwise; but if he fails to do so, he accepts the
acceptance.
Acceptance by performing conditions, or receiving
consideration.
8. Performance of the
conditions of a proposal, or the acceptance of any consideration for a
reciprocal promise which may be offered with a proposal, is an acceptance of
the proposal.
Promises,
express and implied.
What
agreements are contracts.
(1) All agreements are contracts if they are
made the free consent of parties competent to contract, for a lawful
consideration and with a lawful object, and are not hereby expressly declared
to be void, and may, subject to the provisions of this Law, be made in writing,
or by word of mouth, or partly in writing and partly by word of mouth, or may
be implied from the conduct of the parties.
Saving.
(2) Nothing herein contained shall affect any
Law in force in
Capacity to contract. 2 of 7/56.
(1) Subject to the provisions of subsection (2), every person is competent
to contract who-
(b) is not disqualified
from contracting by any Law.
(2) The law in force in
Provided
that a married person shall not be deemed to be incompetent to contract merely
because such person has not attained the age of eighteen years.
What is a
sound mind for the purposes of contracting.
A person who is usually of unsound mind, but occasionally of
sound mind, may make a contract when he is of sound mind.
A person who is usually of sound mind, but occasionally of
unsound mind, may not make a contract when he is of unsound mind.
"Consent"
defined.
13. Two or more persons are said to
consent when they agree upon the same thing in the same sense.
"Free
consent" defined.
14. Consent is said to be free when it
is not caused by-
(a) coercion, as defined
in section 15; or
(b) undue influence, as
defined in section 16; or
(c) fraud, as defined in
section 17; or
(d) misrepresentation,
as defined in section 18; or
(e) mistake subject to
the provisions of sections 20, 21 and 22.
Consent
is said to be so caused when it would not have been given but for the existence
of such coercion, undue influence, fraud, misrepresentation or mistake.
(1) "Coercion" is the committing or
threatening to commit, any act forbidden by the Criminal Code, or any amendment
thereof, or the unlawful detaining, or threatening to detain, any property, to
the prejudice of any person whatever, with the intention of causing any person
to enter into an agreement.
Cap. 154.
(2) It is immaterial whether the Criminal Code, or any amendment thereof, is or is not in force in the
place where the coercion is employed.
"Undue
influence" defined.
(1) A contract is said to be induced by
"undue influence" where the relations subsisting between the parties
are such that one of the parties is in a position to dominate the will of the
other and uses that position to obtain an unfair advantage over the other.
(2) In particular and without prejudice to the
generality of the foregoing principle, a person is deemed to be in a position
to dominate the will of another-
(a) where he holds a
real or apparent authority over the other, or where he stands in a fiduciary
relation to the other; or
(b) where he makes a
contract with a person whose mental capacity is temporarily or permanently
affected by reason of age, illness, or mental or bodily distress.
(3) Where a person who is
in a position to dominate the will of another, enters into a contract with him,
and the transaction appears, on the face of it or on the evidence adduced, to
be unconscionable, the burden of proving that such contract was not induced by
undue influence shall lie upon the person in a position to dominate the will of
the other.
(1) "Fraud" includes any of the
following acts committed by a party to a contract, or with his connivance, or
by his agent, with intent to deceive another party thereto or his agent, or to
induce him to enter into the contract-
(a) the suggestion, as
to a fact, of that which is not true by one who does not believe it to be true;
(b) the active
concealment of a fact by one having knowledge or belief of the fact;
(c) a promise made
without any intention of performing it;
(d) any other act fitted
to deceive;
(e) any such act or
omission as the law specially declares to be fraudulent.
(2) Mere silence as to
facts likely to affect the willingness of a person to enter into a contract is
not fraud, unless the circumstances of the case are such that, regard being had
to them, it is the duty of the person keeping silence to speak, or unless his
silence is, in itself, equivalent to speech.
18. "Misrepresentation"
includes-
(a) the positive
assertion, in a manner not warranted by the information of the person making
it, of that which is not true, though he believes it to be true;
(b) any breach of duty which, without an intent
to deceive, gains an advantage to the person committing it, or any one claiming
under him, by misleading another to his prejudice or to the prejudice of any
one claiming under him;
(c) causing, however
innocently, a party to an agreement to make a mistake as to the substance of
the thing which is the subject to the agreement.
Voidability of agreements
without free consent.
(1) When consent to an agreement is caused by
coercion, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so
caused.
(2) A party to a contract, whose consent was
caused by fraud or misrepresentation, may, if he thinks fit, insist that the
contract shall be performed, and that he shall be put in the position in which
he would have been if the representations made had been true.
(3) If such consent was caused by
misrepresentation or by silence, fraudulent within the meaning of section 17, the contract,
nevertheless, is not voidable, if the party whose
consent was so caused had the means of discovering the truth with ordinary
diligence.
(4) A fraud or misrepresentation which did not
cause the consent to a contract of the party on whom such fraud was practised, or to whom such misrepresentation was made, does
not render a contract voidable.
Power to set aside contract induced by undue influence.
(1) When consent to an agreement is caused by
undue influence, the agreement is a contract voidable
at the option of the party whose consent was so caused.
(2) Any such contract may be set aside either
absolutely or, if the party who was entitled to avoid it has received any
benefit thereunder, upon such terms and conditions as
to the Court may seem just.
Agreement
void where both parties are under mistake as to matter of fact.
(1) Where both the parties to an agreement are
under a mistake as to a matter of fact essential to the agreement, the
agreement is void.
An erroneous
opinion as to the value of the thing which forms the subject-matter of the
agreement is not to be deemed a mistake as to a matter of fact.
Effect of mistakes as to law.
(2) A contract is not voidable
because it was caused by a mistake as to any law in force in
Contract caused
by mistake of one party as to matter of fact.
What
considerations and objects are lawful and what not.
23. The consideration or object of an
agreement is lawful, unless-
(a) it is forbidden by
law; or
(b) is of such a nature
that, if permitted, it would defeat the provisions of any law; or
(d) involves or implies
injury to the person or property of another; or
(e) the Court regards it
as immoral, or opposed to public policy.
In
each of these cases, the consideration or object of an agreement is said to be
unlawful. Every agreement of which the object or consideration is unlawful is
void.
Agreements
void, if considerations and objects unlawful in part.
24. If any part of a single
consideration for one or more objects, or any one or any part of any one of
several considerations for a single object, is unlawful, the agreement is void.
Agreement without consideration, void, unless it is in writing.
(1) An agreement made without consideration is
void, unless-
(a) it is expressed in
writing and signed by the party to be charged therewith, and is made on account
of natural love and affection between parties standing in a near relation to
each other; or unless
or is a
promise to compensate for something done,
(b) it is a promise to compensate, wholly or in
part, a person who has already voluntarily done something for the promisor, or something which the promisor
was legally compellable to do; or unless
or is a
promise to pay a debt, barred by limitation law.
(c) it is a promise,
made in writing and signed by the party to be charged therewith, to pay wholly
or in part a debt of which the creditor might have enforced payment but for any
law for the time being in force relating to prescription or the limitation of
actions.
In any of these
cases, such an agreement is a contract.
(2) Nothing in this
section shall affect the validity, as between the donor and donee,
of any gift actually made.
(3) An agreement to which the consent of the promisor is freely given is not void merely because the
consideration is inadequate; but the inadequacy of the consideration may be
taken into account by the Court in determining the question whether the consent
of the promisor was freely given.
Agreement in restraint of marriage void.
26. Every agreement in restraint of the
marriage of any person is void.
Agreement in restraint of trade void.
(1) Every agreement by which any one is
restrained from exercising a lawful profession, trade, or business of any kind,
is to that extent void.
Saving of
agreement not to carry on business of which good-will is sold;
(a) One who sells the good-will of a business may
agree with the buyer to refrain from carrying on a similar business, within
specified local limits, so long as the buyer or any person deriving title to
the good-will from him, carries on a like business therein: Provided that such
limits appear to the Court reasonable, regard being had to the nature of the
business;
of
agreement between partners prior to dissolution.
(b) partners may, upon or in anticipation of a
dissolution of the partnership, agree that some or all of them will not carry
on a business similar to that of the partnership within such local limits as
are referred to in the last preceding subsection;
or during
continuance of partnership.
(c) partners may agree
that some one or all of them will not carry on any business, other than that of
the partnership, during the continuance of the partnership.
Agreements in
restraint of legal proceedings void.
(1) Every agreement, by which any party thereto
is restricted absolutely from enforcing his rights under or in respect of any
contract, by the usual legal proceedings in the Courts, or which limits the
time within which he may thus enforce his rights, is void to that extent.
Saving of contract to refer to arbitration dispute that may arise.
(2) This section shall not render illegal a
contract by which two or more persons agree that any dispute which may arise
between them in respect of any subject or class of subjects shall be referred
to arbitration, and that only the amount awarded in such arbitration shall be
recoverable in respect of the dispute so referred.
When such a
contract has been made, legal proceedings may be brought for its specific
performance, and if legal proceedings, other than for such specific
performance, or for the recovery of the amount so awarded, are brought by one
party to such contract against any other such party in respect of any subject
which they have so agreed to refer, the existence of such contract shall be a
bar to the legal proceedings.
Saving of contract to refer questions that have already arisen.
(3) This section shall not render illegal any
contract in writing, by which two or more persons agree to refer to arbitration
any question between them which has already arisen, or affect any provision of
any law in force for the time being as to references to arbitration.
Agreements
void for uncertainty.
29. Agreements, the meaning of which is
not certain, or capable of being made certain, are void.
Agreements by
way of wager void.
30. Agreements by way of wager are
void; and no legal proceedings shall be brought for recovering anything alleged
to be won on any wager, or entrusted to any person to abide the result of any
game or other uncertain event on which any wager is made.
"Contingent
contract" defined.
Enforcement
of contracts contingent on an event happening.
32. Contingent contracts to do or not
to do anything if an uncertain future event happens cannot be enforced by law
unless and until that event has happened.
If the event
becomes impossible, such contracts become void.
Enforcement of contracts contingent on an event not happening.
33. Contingent contracts to do or not
to do anything if an uncertain future event does not happen can be enforced
when the happening of that event becomes impossible and not before.
When
contingency is the future conduct of a living person.
34. If the future event on which a
contract is contingent is the way in which a person will act at an unspecified
time, the event shall be considered to become impossible when such person does
anything which renders it impossible that he should so act within any definite
time, or otherwise than under further contingencies.
When
contingency is the happening of specified event within fixed time.
(1) Contingent contracts to do or not to do
anything if a specified uncertain event happens within a fixed time become void
if, at the expiration of the time fixed, such event has not happened, or if,
before the time fixed, such event becomes impossible.
(2) Contingent contracts to do or not to do
anything if a specified uncertain event does not happen within a fixed time may
be enforced by law when the time fixed has expired and such event has not
happened, or, before the time fixed has expired, if it becomes certain that
such event will not happen.
Agreement contingent on impossible events void.
36. Contingent agreements to do or not
to do anything, if an impossible event happens, are void, whether the
impossibility of the event is known or not to the parties to the agreement at
the time when it is made.
Obligation of parties to contracts.
(1) The parties to a contract must either
perform, or offer to perform, their respective promises, unless such
performance is dispensed with or excused under the provisions of this Law, or
of any other Law.
When promises
binding on representatives of promisors.
(2) Promises bind the representatives of the promisors in case of the death of such promisors
before performance, unless a contrary intention appears from the contract.
Effect of refusal to accept offer of performance.
(1) Where a promisor
has made an offer of performance to the promisee, and
the offer has not been accepted, the promisor is not
responsible for non-performance, nor does he thereby lose his rights under the
contract.
(2) Every such offer must fulfil
the following conditions-
(b) it must be made at a proper time and place,
and under such circumstances that the person to whom it is made may have a
reasonable opportunity of ascertaining that the person by whom it is made is
able and willing there and then to do the whole of what he is bound by his
promise to do;
(c) if the offer is an
offer to deliver anything to the promisee, the promisee must have a reasonable opportunity of seeing that
the thing offered is the thing which the promisor is
bound by his promise to deliver.
(3) An offer to one of
several joint promisees has the same legal
consequences as an offer to all of them.
Effect of refusal of party to perform promise
wholly.
39. When a party to a contract has
refused to perform, or disabled himself from performing, his promise in its
entirety, the promisee may put an end to the
contract, unless he has signified, by words or conduct, his acquiescence in its
continuance.
Person by whom promise is to be performed.
40. If it appears from the nature of
the case that it was the intention of the parties to any contract that any
promise contained in it should be performed by the promisor
himself, such promise must be performed by the promisor.
In other cases, the promisor or his representatives
may employ a competent person to perform it.
Effect of accepting performance from third person.
41. When a promisee
accepts performance of the promise from a third person, he cannot afterwards
enforce it against the promisor.
Devolution of joint liabilities.
42. When two or more persons have made
a joint promise then unless a contrary intention appears by the contract, all
such persons, during their joint lives, and after the death of any of them, his
representative jointly with the survivor or survivors, and after the death of
the last survivor, the representatives of all jointly, must fulfil
the promise.
Any one of
joint promisors may be compelled to perform.
(1) When two or more persons make a joint promise,
the promisee may, in the absence of express agreement
to the contrary, compel any one or more of such joint promisors
to perform the whole of the promise.
Each promisor may compel contribution.
(2) Each of two or more joint promisors may compel every other joint promisor
to contribute equally with himself to the performance of the promise, unless a
contrary intention appears from the contract.
Sharing of loss by default in contribution.
(3) If any one of two or more joint promisors makes default in such contribution, the remaining
joint promisors must bear the loss arising from such
default in equal shares.
Saving.
(4) Nothing in this section shall prevent a
surety from recovering from his principal, payments
made by the surety on behalf of the principal, or entitle the principal to
recover anything from the surety on account of payments made by the principal.
Effect of release of one joint promisor.
44. Where two or more persons have made
a joint promise, a release of one of such joint promisors
by the promisee does not discharge the other joint promisor or joint promisors;
neither does it free the joint promisor so released
from responsibility to the other joint promisor or
joint promisors.
Devolution of joint rights.
45. When a person has made a promise to
two or more persons jointly, then, unless a contrary intention appears from the
contract, the right to claim performance rests, as between him and them, with
them during their joint lives, and, after the death of any of them, with the
representative of such deceased person jointly with the survivor or survivors,
and, after the death of the last survivor, with the representatives of all
jointly.
Time for
performance of promise where no application is to be made and no time is specified.
46. Where, by the contract, a promisor is to perform his promise without application by
the promisee, and no time for performance is
specified, the engagement must be performed within a reasonable time.
The question
"what is a reasonable time" is, in each particular case, a question
of fact.
Time and
place for performance of promise where time is specified and no application to
be made.
47. When a promise is to be performed
on a certain day, and the promisor has undertaken to
perform it without application by the promisee, the promisor may perform it at any time during the usual hours
of business on such day and at the place at which the promise ought to be
performed.
Application for performance on certain day to be at proper time and
place.
48. When a promise is to be performed
on a certain day, and the promisor has not undertaken
to perform it without application by the promisee, it
is the duty of the promisee to apply for performance
at a proper place and within the usual hours of business.
The question
"what is a proper time and place" is, in each particular case, a
question of fact.
Place for
performance of promise where no application to be made and no place fixed for
performance.
49. When a promise is to be performed
without application by the promisee, and no place is
fixed for the performance of it, it is the duty of the promisor
to apply to the promisee to appoint a reasonable
place for the performance of the promise, and to perform it at such place.
Performance
in manner or at time prescribed or sanctioned by promise.
50. The performance of any promise may
be made in any manner, or at any time, which the promisee
prescribes or sanctions.
Promisor not bound to perform, unless
reciprocal promisee ready and willing to perform.
51. When a contract consists of
reciprocal promises to be simultaneously performed, no promisor
need perform his promise unless the promisee is ready
and willing to perform his reciprocal promise.
Order of performance of reciprocal promises.
52. Where the order in which reciprocal
promises are to be performed is expressly fixed by the contract, they shall be
performed in that order; and, where the order is not expressly fixed by the
contract, they shall be performed in that order which the nature of the
transaction requires.
Liability of party preventing event on which contract is to take effect.
53. When a contract contains reciprocal
promises, and one party to the contract prevents the other from performing his
promise, the contract becomes voidable at the option
of the party so prevented; and he is entitled to compensation from the other
party for any loss which he may sustain in consequence of the non-performance
of the contract.
Effect of default as to that promise which should be first performed in
contract consisting of reciprocal promises.
54. When a contract consists of
reciprocal promises, such that one of them cannot be performed, or that its
performance cannot be claimed till the other has been performed, and the promisor of the promise last mentioned fails to perform it,
such promisor cannot claim the performance of the
reciprocal promise, and must make compensation to the other party to the
contract for any loss which such other party may sustain by the non-performance
of the contract.
Effect of
failure to perform at fixed time, in contract in which time is essential.
(1) When a party to a contract promises to do a
certain thing at or before a specified time, or certain things at or before
specified times, and fails to do any such thing at or before the specified
time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee,
if the intention of the parties was that time should be of the essence of the contract.
Effect of
such failure when time is not essential.
(2) If it was not the intention of the parties
that time should be of the essence of the contract, the contract does not
become voidable by the failure to do such thing at or
before the specified time; but the promisee is
entitled to compensation from the promisor for any
loss occasioned to him by such failure.
Effect of
acceptance of performance at time other than that agreed upon.
(3) If, in case of a contract voidable on account of the promisor's
failure to perform his promise at the time agreed, the promisee
accepts performance of such promise at any time other than that agreed, the promisee cannot claim compensation for any loss occasioned
by the non-performance of the promise at the time agreed, unless, at the time
of such acceptance, he gives notice to the promisor
of his intention to do so.
Agreement to do impossible act.
(1) An agreement to do an act impossible in
itself is void.
Contract to do act afterwards becoming impossible or unlawful.
(2) A contract to do an act which, after the
contract is made, becomes impossible, or, by reason of some event which the promisor could not prevent, unlawful, becomes void when the
act becomes impossible or unlawful.
Compensation for loss through non performance of act known to be
impossible or unlawful.
(3) Where one person has promised to do
something which he knew, or, with reasonable diligence, might have known, and
which the promisee did not know to be impossible or
unlawful, such promisor must make compensation to
such promisee for any loss which such promisee sustains through the non-performance of the
promise.
Reciprocal
promise to do things legal, and also other things
illegal.
57. Where persons reciprocally promise,
firstly, to do certain things which are legal, and, secondly, under specified
circumstances, to do certain other things which are illegal, the first set of
promises is a contract, but the second is a void agreement.
Alternative promise, one branch being illegal.
Application of payment where debt to be discharged is indicated.
59. Where a debtor, owing several distinct
debts to one-person, makes a payment to him, either with express intimation, or
under circumstances implying that the payment is to be applied to the discharge
of some particular debt, the payment, if accepted, must be applied accordingly.
Application of payment where debt to be discharged not indicated.
60. Where the debtor has omitted to
intimate and there are no other circumstances indicating to which debt the
payment is to be applied, the creditor may apply it at his discretion to any
lawful debt actually due and payable to him from the debtor, whether its
recovery is or is not barred by the law in force for the time being relating to
prescription or the limitation of actions.
Application
of payment where neither party appropriates.
61. Where neither party makes any
appropriation the payment shall be applied in discharge of the debts in order
of time, whether they are or are not barred by the law in force for the time
being relating to prescription or the limitation of actions. If the debts are of
equal standing, the payment shall be applied in discharge of each proportionably.
Effect of novation, rescission and alteration
of contract.
62. If the parties to a contract agree
to substitute a new contract for it, or to rescind or alter it, the original
contract need not be performed.
Promisee
may dispense with or remit performance of promise.
63. Every promisee
may dispense with or remit, wholly or in part, the performance of the promise
made to him, or may extend the time for such performance, or may accept instead
of it any satisfaction which he thinks fit.
Consequences of rescission of voidable
contract.
64. When a person at whose option a
contract is voidable rescinds it, the other party
thereto need not perform any promise therein contained in which he is promisor. The party rescinding a voidable
contract shall, if he have received any benefit thereunder
from another party to such contract, restore such benefit, so far as may be, to
the person from whom it was received.
Obligation of
person who has received advantage under void agreement or contract that becomes
void.
65. When an agreement is discovered to
be void, or when a contract becomes void, any person who has received any
advantage under such agreement or contract is bound to restore it, or to make
compensation for it, to the person from whom he received it.
Mode of communicating or revoking rescission of voidable
contract.
66. The rescission of a voidable contract may be communicated or revoked in the
same manner, and subject to the same rules, as apply to the communication or
revocation of a proposal.
Effect of neglect of promisee to afford promisor reasonable facilities for performance.
67. If any promisee
neglects or refuses to afford the promisor reasonable
facilities for the performance of his promise, the promisor
is excused by such neglect or refusal as to any non-performance caused thereby.
Claim for
necessaries supplied to person incapable of contracting, or on his account.
68. If a person, incapable of entering
into a contract, or, any one whom he is legally bound to support, is supplied
by another person with necessaries suited to his condition in life, the person
who has furnished such supplies is entitled to be reimbursed from the property
of such incapable person.
Reimbursement of person paying money due by another in payment of which
he is interested.
Obligation of person enjoying benefit of non-gratuitous act.
70. Where a person lawfully does
anything for another person, or delivers anything to him, not intending to do
so gratuitously, and such other person enjoys the benefit thereof, the latter
is bound to make compensation to the former in respect of, or to restore, the
thing so done or delivered.
Responsibility of finder of goods.
Liability of
person to whom money is paid, or thing delivered, by mistake or under coercion.
Compensation for loss or damage caused by breach of contract.
(1) When a contract has been broken, the party
who suffers by such breach is entitled to receive, from the party who has
broken the contract, compensation for any loss or damage caused to him thereby,
which naturally arose in the usual course of things from such breach, or which
the parties knew, when they made the contract, to be likely to result from the
breach of it.
Such compensation
is not to be given for any remote and indirect loss or damage sustained by
reason of the breach.
Compensation for failure to discharge obligations resembling those
created by contract.
(2) When an obligation resembling those created
by contract has been incurred and has not been discharged, any person injured
by the failure to discharge it is entitled to receive the same compensation
from the party in default, as if such person had contracted to discharge it and
had broken his contract.
Existing
means of remedy to be taken into account.
(3) In estimating the loss or damage arising
from a breach of contract, the means which existed of remedying the
inconvenience caused by the non-performance of the contract must be taken into
account.
Compensation for breach of contract where penalty stipulated for.
(1) When a contract has been broken, if a sum
is named in the contract as the amount to be paid in case of such breach, or if
the contract contains any other stipulation by way of penalty, the party
complaining of the breach is entitled, whether or not actual damage or loss is
proved to have been caused thereby, to receive from the party who has broken
the contract reasonable compensation not exceeding the amount so named or, as
the case may be, the penalty stipulated for.
Saving.
A stipulation for
increased interest from the date of default may be a stipulation by way of
penalty.
(2) When any person enters into any bailbond, recognisance or other
instrument of the same nature, or, under the provisions of any Law, or under
the orders of the Government of Cyprus, gives any bond for the performance of
any public duty or act in which the public are interested, he shall be liable,
upon breach of the condition of any such instrument, to pay the whole sum
mentioned therein:
Provided that a person who enters
into a contract with Government does not necessarily thereby undertake any
public duty, or promise to do an act in which the public are interested.
Party
rightfully rescinding contract entitled to compensation.
Specific performance of contracts and requisites thereof.
(1) A contract shall be capable of being
specifically enforced by the Court if-
(a) it is not a void
contract under this or any other Law; and
(b) it is expressed in
writing; and
(c) it is signed at the
end thereof by the party to be charged therewith; and
(d) the Court considers,
having regard to all the circumstances, that the enforcement of specific
performance of the contract would not be unreasonable or otherwise inequitable
or impracticable.
(2) Nothing herein contained shall affect the
specific performance of contracts for the sale of immovable property under the
provisions of the
Requirements
for leases and contracts made in consideration of marriage. 2
of 6'59.
(b) signed at the end
thereof, in the presence of at least two witnesses themselves competent to
contract who have subscribed their names as witnesses, by each party to be
charged therewith or by a person who is himself competent to contract and who
has been duly authorised to sign on behalf of such
party.
(2) Contracts relating to obligations in
consideration of marriage shall not be valid and enforceable unless-
(b) signed at the end
thereof, in the presence of at least two witnesses themselves competent to
contract who have subscribed their names as witnesses, by each party to be
charged therewith or by a person who is himself competent to contract and who
has been duly authorised to sign on behalf of such
party:
Provided that this subsection shall not apply to
obligations in consideration of marriage between Moslems incurred in accordance
with the practice prevailing in the Turkish Family Courts.
"Bond in
customary form," "Debtor" and "Creditor" defined, and
essentials of bond.
The person who
makes the promise is called the "debtor"; the person to whom the
promise is made is called the "creditor."
Bond secured
by guarantee, pledge or mortgage.
Conclusiveness of contents of bond.
80. Whenever any legal proceedings are
taken on a bond in customary form, the contents of such bond shall be
conclusive evidence of the facts therein stated:
Provided that in any such proceedings it shall
be a good defence to prove that the signature of the debtor or of any other
party to the bond is not in fact the signature of such debtor or party or that
the bond has been obtained by, or in circumstances amounting to, coercion or
fraud.
Saving.
81. Nothing herein contained shall, in
respect of bonds in customary form, affect any power given or exercisable by or
under the provisions of any of the following Laws or any amendments thereof-
Cap. 101.
Cap. 132.
(b) the Dealings between
Merchants and Farmers Law.
"Contract of indemnity" defined.
Right of
indemnity-holder when sued:
83. The promisee
in a contract of indemnity, acting within the scope of his authority, is
entitled to recover from the promisor-
(a) all damages which he
may be compelled to pay in any legal proceedings in respect of any matter to
which the promise to indemnify applies;
(b) all costs which he may be compelled to pay in
any such legal proceedings if, in bringing or defending them, he did not
contravene the orders of the promisor, and acted as
it would have been prudent for him to act in the absence of any contract of
indemnity, or if the promisor authorised
him to bring or defend the legal proceedings;
(c) all sums which he may have paid under the
terms of any compromise of any such legal proceedings, if the compromise was
not contrary to the orders of the promisor, and was
one which it would have been prudent for the promisee
to make in the absence of any contract of indemnity, or if the promisor authorised him to
compromise the legal proceedings.
"Contract of guarantee," "surety,"
"principal debtor," and "creditor."
Consideration for guarantee.
85. Anything done, or any promise made,
for the benefit of the principal debtor may be a sufficient consideration to
the surety for giving the guarantee.
Surety's liability.
86. The liability of the surety is co-extensive with that of the principal
debtor, unless it is otherwise provided by the contract.
"Continuing guarantee."
Revocation of continuing guarantee.
Revocation of continuing guarantee by surety's death.
89. The death of the surety operates,
in the absence of any contract to the contrary, as a revocation of a continuing
guarantee, so far as regards future transactions.
Liability of two persons, primarily liable, not affected by arrangement
between them that one shall be surety on other's default.
90. Where two persons contract with a
third person to undertake a certain liability, and also contract with each
other that one of them shall be liable only on the default of the other, the
third person not being a party to such contract, the liability of each of such
two persons to the third person under the first contract is not affected by the
existence of the second contract, although such third person may have been
aware of its existence.
Discharge of
surety by variance in terms of contract.
91. Any variance, made without the
surety's consent, in the terms of the contract between the principal and the
creditor, discharges the surety as to transactions subsequent to the variance.
Discharge of
surety by release or discharge of principal debtor.
92. The surety is discharged by any
contract between the creditor and the principal debtor, by which the principal
debtor is released, or by any act or omission of the creditor, the legal
consequence of which is the discharge of the principal debtor.
Discharge of
surety when creditor compounds with, gives time to, or agrees not to sue
principal debtor.
Surety not
discharged when agreement made with third person to give time to principal
debtor.
94. Where a contract to give time to
the principal debtor is made by the creditor with a third person, and not with
the principal debtor, the surety is not discharged.
Creditor's
forbearance to sue does not discharge surety.
95. Mere forbearance on the part of the
creditor to sue the principal debtor or to enforce any other remedy against him
does not, in the absence of any provision in the guarantee to the contrary,
discharge the surety.
Release of
one co-surety does not discharge others.
96. Where there are co-sureties, a
release by the creditor of one of them does not discharge the others; neither
does it free the surety so released from his responsibility to the other
sureties.
Discharge of
surety by creditor's act or omission impairing surety's eventual remedy.
97. If the creditor does any act which
is inconsistent with the rights of the surety, or omits to do any act which his
duty to the surety requires him to do, and the eventual remedy of the surety
himself against the principal debtor is thereby impaired, the surety is
discharged.
Rights of surety on payment or performance.
98. Where a guaranteed debt has become
due, or default of the principal debtor to perform a guaranteed duty has taken
place, the surety, upon payment or performance of all that he is liable for, is
invested with all the rights which the creditor had against the principal
debtor.
Surety's
right to benefit of creditor's securities.
(1) A surety is entitled to the benefit of
every security which the creditor has against the principal debtor at the time
when the contract of suretyship is entered into,
whether the surety knows of the existence of such security or not; and, if the
creditor loses or, without the consent of the surety, parts with such security,
the surety is discharged to the extent of the value of the security.
Saving.
Cap. 6.
(2) Nothing in this or in the last preceding
section contained shall affect the provisions of the Civil Procedure Law, or
any amendment thereof.
Guarantee
obtained by misrepresentation invalid.
100. Any guarantee which has been
obtained by means of misrepresentation made by the creditor, or with his
knowledge and assent, concerning a material part of the transaction, is
invalid.
Guarantee
obtained by concealment invalid.
101. Any guarantee which the creditor
has obtained by means of keeping silence as to material circumstance is
invalid.
Guarantee on
contract that creditor shall not act on it until co-surety joins.
102. Where a person gives a guarantee
upon a contract that the creditor shall not act upon it until another person
has joined in it as co-surety, the guarantee is not valid if that other person
does not join.
Implied promise to indemnify surety.
Co-sureties liable to contribute equally.
104. Where two or more persons are
co-sureties for the same debt or duty, either jointly or severally, and whether
under the same or different contracts, and whether with or without the
knowledge of each other, the co-sureties, in the absence of any contract to the
contrary, are liable, as between themselves, to pay each an equal share of the
whole debt, or of that part of it which remains unpaid by the principal debtor.
Liability of
co-sureties bound in different sums.
105. Co-sureties who are bound in different
sums are liable to pay equally as far as the limits of their respective
obligations permit.
"Goods,"
"company," "bailment," "bailor,"
and "bailee" defined.
(a) "goods" means every kind of movable
property and includes bills of exchange, promissory notes, bonds whether in
customary form or not other than those secured by mortgage of immovable
property, share certificates or share warrants for shares in a company;
Cap. 113.
"company"
means a limited liability company formed under the provisions of the Companies
Law, or any amendment thereof, or an anonyme company
originally formed under the provisions of the Ottoman Commercial Code;
(b) a
"bailment" is the delivery of goods by one person to another for some
purpose, upon a contract that they shall, when the purpose is accomplished, be
returned or otherwise disposed of according to the directions of the person
delivering them. The person delivering the goods is called the "bailor." The person to whom they are delivered is
called the "bailee."
(2) If a person already in
possession of the goods of another contracts to hold
them as a bailee, he thereby becomes the bailee, and the owner becomes the bailor,
of such goods although they may not have been delivered by way of bailment.
107. The delivery to the bailee may be made by doing anything which has the effect
of putting the goods in the possession of the intended bailee
or of any person authorised to hold them on his
behalf.
Bailor's
duty to disclose faults in goods bailed.
(1) The bailor
is bound to disclose to the bailee faults in the
goods bailed, of which the bailor is aware, and which
materially interfere with the use of them, or expose the bailee
to extraordinary risks; and, if he does not make such disclosure, he is
responsible for damage arising to the bailee directly
from such faults.
(2) If the goods are bailed for
hire, the bailor is responsible for such damage,
whether he was or was not aware of the existence of such faults in the goods
bailed.
Care to be
taken by bailee.
Bailee
when not liable for loss, etc., of thing bailed.
110. The bailee,
in the absence of any special contract, is not responsible for the loss,
destruction or deterioration of the thing bailed, if he has taken the amount of
care of it described in the last preceding section.
Termination of bailment by bailee's act
inconsistent with conditions.
Liability of bailee making unauthorised use of
goods bailed.
112. If the bailee
makes any use of the goods bailed, which is not according to the conditions of
the bailment, he is liable to make compensation to the bailor
for any damage arising to the goods from or during such use of them.
Effect of mixture, with bailor's consent, of
his goods with bailee's.
113. If the bailee,
with the consent of the bailor, mixes the goods of
the bailor with his own goods, the bailor and the bailee shall have
an interest, in proportion to their respective shares, in the mixture thus
produced.
Effect of mixture, without bailor's consent,
when the goods can be separated.
114. If the bailee,
without the consent of the bailor, mixes the goods of
the bailor with his own goods, and the goods can be
separated or divided, the property in the goods remains in the parties
respectively; but the bailee is bound to bear the
expense of separation or division, and any damage arising from the mixture.
Effect of mixture, without bailor's consent,
when the goods cannot be separated.
115. If the bailee,
without the consent of the bailor, mixes the goods of
the bailor with his own goods, in such a manner that
it is impossible to separate the goods bailed from the other goods and deliver
them back, the bailor is entitled to be compensated
by the bailee for the loss of the goods.
Repayment by bailor of necessary expenses.
116. Where, by the conditions of the
bailment, the goods are to be kept or to be carried, or to have work done upon
them by the bailee for the bailor,
and the bailee is to receive no remuneration, the bailor shall repay to the bailee
the necessary expenses incurred by him for the purpose of the bailment.
Restoration
of goods lent gratuitously.
117. The lender of a thing for use may
at any time require its return, if the loan was gratuitous, even though he lent
it for a specified time or purpose. But, if, on the faith of such loan made for
a specified time or purpose, the borrower has acted in such a manner that the
return of the thing lent before the time agreed upon would cause him loss
exceeding the benefit actually derived by him from the loans, the lender must,
if he compels the return, indemnify the borrower for the amount in which the
loss so occasioned exceeds the benefit so derived.
Return of
goods bailed on expiration of time or accomplishment of purpose.
118. It is the duty of the bailee to return, or deliver according to the bailor's directions, the goods bailed, without demand, as
soon as the time for which they were bailed has expired, or the purpose for
which they were bailed has been accomplished.
Bailee's
responsibility when goods are not duly returned.
119. If, by the default of the bailee, the goods are not returned, delivered or tendered
at the proper time, he is responsible to the bailor
for any loss, destruction or deterioration of the goods from that time.
Termination of gratuitous bailment by death.
Bailor
entitled to increase or profit from goods bailed.
Bailor's responsibility to bailee.
122. The bailor
is responsible to the bailee for any loss which the bailee may sustain by reason that the bailor
was not entitled to make the bailment, or to receive back the goods or to give
directions respecting them.
Bailment by several joint owners.
123. If several joint owners of goods
bail them, the bailee may deliver them back to, or
according to the directions of, one joint owner without the consent of all, in
the absence of any agreement to the contrary.
Bailee not responsible on re-delivery to bailor without title.
124. If the bailor
has no title to the goods, and the bailee, in good
faith, delivers them back to, or according to the directions of, the bailor, the bailee is not
responsible to the owner in respect of such delivery.
Right of
third person claiming goods bailed.
125. If a person other than the bailor,
claims goods bailed, he may take legal proceedings to stop the delivery of the
goods to the bailor, and to decide the title to the
goods.
Right of
finder of goods; may sue for specific reward offered.
126. The finder of goods has no right to
sue the owner for compensation for trouble and expense voluntarily incurred by
him to preserve the goods and to find out the owner; but he may retain the
goods against the owner until he receives such compensation; and, where the
owner has offered a specific reward for the return of goods lost, the finder
may sue for such reward, and may retain the goods until he receives it.
When finder of thing commonly on sale may sell it.
127. When a thing which is commonly the
subject of sale is lost, if the owner cannot with reasonable diligence be
found, or if he refuses, upon demand, to pay the lawful charges of the finder,
the finder may sell it-
(a) when the thing is in
danger of perishing or of losing the greater part of its value; or
(b) when the lawful
charges of the finder, in respect of the thing found, amount to two-thirds of
its value.
128. Where the bailee has, in accordance with the purpose of the bailment,
rendered any service involving the exercise of labour or skill in respect of
the goods bailed, he has, in the absence of a contract to the contrary, a right
to retain such goods until he receives due remuneration for the services he has
rendered in respect of them.
General lien of bankers, factors and wharfingers.
129. Bankers, factors and wharfingers, may, in the absence of a contract to the
contrary, retain, as a security for a general balance of account, any goods
bailed to them; but no other persons have a right to retain, as a security for
such balance, goods bailed to them, unless there is an express contract to that
effect.
"Pledge,"
"pawnor" and "pawnee"
defined.
130. The bailment of goods as security
for payment of a debt or performance of a promise is called "pledge."
The bailor is in this case called the "pawnor." The bailee is
called the "pawnee."
Pawnee's
right of retainer.
131. The pawnee may retain the goods pledged, not only for
payment of the debt or the performance of the promise, but for the interest of
the debt, and all necessary expenses incurred by him in respect of the
possession or for the preservation of the goods pledged.
Pawnee not to retain for debt or promise other than that for which goods
pledged. Presumption in case of subsequent advances.
132. The pawnee shall not, in the absence of a contract to
that effect, retain the goods pledged for any debt or promise other than the
debt or promise for which they are pledged; but such contract, in the absence
of anything to the contrary, shall be presumed in regard to subsequent advances
made by the pawnee.
Pawnee's
right as to extraordinary expenses incurred.
133. The pawnee is entitled to receive from the pawnor extraordinary expenses incurred by him for the
preservation of the goods pledged.
Pawnee's
right where pawnor makes default.
(1) If the pawnor
makes default in payment of the debt, or performance, at the stipulated time of
the promise, in respect of which the goods were pledged, the pawnee may bring legal proceedings against the pawnor upon the debt or promise, and retain the goods
pledged as a collateral security; or he may sell the thing pledged, on giving
the pawnor reasonable notice of the sale.
(2) If the proceeds of such sale are
less than the amount due in respect of the debt or promise, the pawnor is still liable to pay the balance. If the proceeds
of the sale are greater than the amount so due, the pawnee shall pay over the surplus to the pawnor.
Defaulting pawnor's right to redeem.
135. If a time is stipulated for the
payment of the debt, or performance of the promise, for which the pledge is
made, and the pawnor makes default in payment of the
debt or performance of the promise at the stipulated time, he may redeem the
goods pledged at any subsequent time before the actual sale of them; but he
must, in that case, pay, in addition, any expenses which have arisen from his
default.
Pledge by possessor
of goods, or of documentary title to goods.
Provided that the pawnee acts in good faith, and
under circumstances which are not such as to raise a reasonable presumption
that the pawnor is acting improperly:
Provided
also that such goods or documents have not been obtained from their lawful
owner, or from any person in lawful custody of them, by means of an offence or
fraud.
Pledge where pawnor has only a limited
interest.
137. Where a person pledges goods in
which he has only a limited interest, the pledge is valid to the extent of that
interest.
Requirements for a pledge of bills of exchange, promissory notes, etc.
(a) bills of exchange, or
(b) promissory notes, or
(c) bonds, whether in customary form or not, other than those
secured by mortgage of immovable property, or
(d) share certificates or share warrants for shares in a
company, as security for payment of a debt or performance of a promise,
shall not be valid and enforceable unless
the contract of pledge-
(i) is expressed in writing, and
(ii) is signed at the end thereof by the pawnor,
and
(iii) is made in the presence of at least two witnesses themselves
competent to contract and subscribed by them with their names as witnesses.
Additional requirements for pledge of shares.
(2) A pledge of share certificates
or share warrants for shares in a company transferable otherwise than by
delivery shall not be valid and enforceable unless, in addition to the
requirements of the preceding subsection-
(a) notice of such
pledge, together with a certified copy of the contract of pledge, is given by
the pawnee to the company, and
(b) the company shall
have made a memorandum of such pledge in the register of shareholders against
the shares in respect of which the notice shall have been given, and
(c) the company shall
have delivered to the pawnee a certificate that a
memorandum of such pledge has been made in the register as aforesaid.
Pawnee's right where pawnor makes
default in contract of pledge made in accordance with last preceding section.
Legal proceedings by bailor or bailee against wrong-doer.
140. If a third person wrongfully
deprives the bailee of the use or possession of the
goods bailed, or does them any injury, the bailee is
entitled to use such remedies as the owner might have used in the like case if
no bailment had been made; and either the bailor or
the bailee may bring legal proceedings against a
third person for such deprivation or injury.
Apportionment of relief or compensation obtained by such legal
proceedings.
141. Whatever is obtained by way of
relief or compensation in any such legal proceedings shall, as between the bailor and the bailee, be dealt
with according to their respective interests.
"Agent"
and "principal" defined.
142. An "agent" is a person
employed to do any act for another or to represent another in dealings with
third persons. The person for whom such act is done, or who is so represented,
is called the "principal."
Who may
employ agent.
143. Any person who is competent to
contract may employ an agent.
Who may be an
agent.
144. As between the principal and third
persons any person may become an agent, but no person who is not competent to
contract can become an agent, so as to be responsible to his principal
according to the provisions in that behalf herein contained.
Consideration not necessary.
145. No consideration is necessary to
create an agency.
Agent's
authority may be expressed or implied.
146. The authority of an agent may be
expressed or implied.
Definitions of express and implied authority.
147. An authority is said to be express
when it is given by words spoken or written. An authority is said to be implied
when it is to be inferred from the circumstances of the case; and things spoken
or written, or the ordinary course of dealing, may be accounted circumstances
of the case.
Extent of agent's authority.
(1) An agent having an authority to
do an act has authority to do every lawful thing which is necessary in order to
do such act.
(2) An agent having an authority to
carry on a business has authority to do every lawful thing necessary for the
purpose, or usually done in the course of conducting such business.
Agent's authority in an emergency.
149. An agent has authority, in an emergency, to do all such acts for the purpose of protecting
his principal from loss as would be done by a person of ordinary prudence, in
his own case, under similar circumstances.
When agent cannot delegate.
150. An agent cannot lawfully employ
another to perform acts which he has expressly or impliedly undertaken to
perform personally, unless by the ordinary custom of trade a sub-agent may, or, from the nature of
the agency, a sub-agent must, be employed.
"Sub-agent"
defined.
Representation of principal by sub-agent properly appointed.
(1) When a sub-agent is properly
appointed, the principal is, so far as regards third persons, represented by
the sub-agent, and is bound by and responsible for his acts, as if he were an
agent originally appointed by the principal.
Agent's responsibility for sub-agent.
(2) The agent is responsible to the
principal for the acts of the sub-agent.
Sub-agent's responsibility.
(3) The sub-agent is responsible for
his acts to the agent, but not to the principal, except in case of fraud or wilful wrong.
Agent's responsibility for sub-agent appointed without authority.
153. Where an agent, without having
authority to do so, has appointed a person to act as a sub-agent, the agent
stands towards such person in the relation of a principal to an agent, and is
responsible for his acts both to the principal and to third persons; the
principal is not represented by or responsible for the acts of the person so
employed, nor is that person responsible to the principal.
Relation between principal and person duly appointed by agent to act in
business of agency.
154. Where an agent, holding an express
or implied authority to name another person to act for the principal in the business
of the agency, has named another person accordingly, such person is not a
sub-agent, but an agent of the principal for such part of the business of the
agency as is entrusted to him.
Agent's duty in naming such person.
Right of person as to acts done for him without his authority Effect of
ratification.
156. Where acts are done by one person
on behalf of another, but without his knowledge or authority, he may elect to
ratify or to disown such acts. If he ratify them, the
same effects will follow as if they had been performed by his authority.
Ratification
may be expressed or implied.
157. Ratification may be expressed or
may be implied in the conduct of the person on whose behalf the acts are done.
Knowledge requisite for valid ratification.
158. No valid ratification can be made
by a person whose knowledge of the facts of the case is materially defective.
Effect of ratifying unauthorised act forming
part of a transaction.
Ratification
of unauthorised act cannot injure third person.
160. An act done by one person on behalf
of another, without such other person's authority, which, if done with
authority, would have the effect of subjecting a third person to damages, or of
terminating any right or interest of a third person, cannot, by ratification,
be made to have such effect.
Termination of agency.
161. An agency is terminated by the
principal revoking his authority; or by the agent renouncing the business of
the agency; or by the business of the agency being completed; or by either the
principal or agent dying or becoming of unsound mind; or by the principal being
adjudicated a bankrupt or insolvent under the provisions of any Law for the
time being in force relating to bankruptcy or insolvency.
Termination of agency, where agent has an interest in subject-matter.
162. Where the agent has himself an interest
in the property which forms the subject-matter of the agency, the agency
cannot, in the absence of an express contract, be terminated to the prejudice
of such interest.
When principal may revoke agent's authority.
163. The principal may, save as is
otherwise provided by the last preceding section, revoke the authority given to
his agent at any time before the authority has been exercised so as to bind the
principal.
Revocation where authority has been partly exercised.
164. The principal cannot revoke the
authority given to his agent after the authority has been partly exercised so
far as regards such acts and obligations as arise from acts already done in the
agency.
Compensation for revocation by principal or renunciation by agent.
165. Where there is an express or
implied contract that the agency should be continued for any period of time,
the principal must make compensation to the agent, or the agent to the
principal, as the case may be, for any previous revocation or renunciation of
the agency without sufficient cause.
Notice of revocation or renunciation.
166. Reasonable notice must be given of
such revocation or renunciation; otherwise the damage thereby resulting to the
principal or the agent, as the case may be, must be made good to the one by the
other.
Revocation
and renunciation may be expressed or implied.
167. Revocation and renunciation may be
expressed or may be implied in the conduct of the principal or agent
respectively.
When termination of agent's authority takes effect as to agent, and as
to third persons.
168. The termination of the authority of
an agent does not, so far as regards the agent, take effect before it becomes
known to him, or, so far as regards third persons, before it becomes known to
them.
Agent's duty on termination of agency by principal's death or insanity.
169. When an agency is terminated by the
principal dying or becoming of unsound mind, the agent is bound to take, on
behalf of the representatives of his late principal, all reasonable steps for
the protection and preservation of the interests entrusted to him.
Termination of sub-agent's authority.
170. The termination of the authority of
an agent causes the termination (subject to the rules herein contained
regarding the termination of an agent's authority) of the authority of all sub-agents appointed by him.
Agent's duty in conducting principal's business.
171. An agent is bound to conduct the
business of his principal according to the directions given by the principal,
or, in the absence of any such directions, according to the custom which
prevails in doing business of the same kind at the place where the agent
conducts such business. When the agent acts otherwise, if any loss be
sustained, he must make it good to his principal, and, if any profit accrues,
he must account for it.
Skill and
diligence required from agent.
172. An agent is bound to conduct the
business of the agency with as much skill as is generally possessed by persons
engaged in similar business, unless the principal has notice of his want of
skill. The agent is always bound to act with reasonable diligence, and to use
such skill as he possesses; and to make compensation to his principal in
respect of the direct consequences of his own neglect want of skill or
misconduct, but not in respect of loss or damage which are indirectly or
remotely caused by such neglect, want of skill or misconduct.
Agent's accounts.
173. An agent is bound to render proper
accounts to his principal on demand.
Agent's duty to communicate with principal.
174. It is the duty of an agent, in
cases of difficulty, to use all reasonable diligency
in communicating with his principal and in seeking to obtain his instruction.
Right of principal when agent deals on his own account, in business of
agency without principal's consent.
175. If an agent deals on his own
account in the business of the agency, without first obtaining the consent of
his principal and acquainting him with all material circumstances which have
come to his own knowledge on the subject, the principal may repudiate the
transaction, if the case shows either that any material fact has been
dishonestly concealed from him by the agent, or that the dealings of the agent
have been disadvantageous to him.
Principal's
right to benefit gained by agent dealing on his own account in business of
agency.
176. If an agent, without the knowledge
of his principal, deals in the business of the agency on his own account
instead of on account of his principal, the principal is entitled, notwithstanding
anything contained in Part VIII of this Law, to claim
from the agent any benefit which may have resulted to him from the transaction.
Agent's right
of retainer out of sums received on principal's account.
177. An agent may retain, out of any
sums received on account of the principal in the business of the agency all
moneys due to himself in respect of advances made or expenses properly incurred
by him in conducting such business, and also such remuneration as may be
payable to him for acting as agent.
Agent's duty
to pay sums received for principal.
178. Subject to such deductions, the
agent is bound to pay to his principal all sums received on his account.
When agent's remuneration becomes due.
Agent not
entitled to remuneration for business misconducted.
180. An agent who is guilty of
misconduct in the business of the agency is not entitled to any remuneration in
respect of that part of the business which he has misconducted.
Agent's lien on principal's property.
Agent to be indemnified against consequences of lawful acts.
182. The employer of an agent is bound
to indemnify him against the consequences of all lawful acts done by such agent
in exercise of the authority conferred upon him.
Agent to be indemnified against consequences of acts done in good faith.
183. Where one person employs another to
do an act, and the agent does the act in good faith, the employer is liable to
indemnify the agent against the consequences of that act, though it cause an
injury to the rights of third persons.
Non-liability of employer of agent to do a criminal act.
184. Where one person employs another to
do an act which is criminal, the employer is not liable to the agent, either
upon an express or an implied promise, to indemnify him against the
consequences of that act.
Compensation to agent for injury caused by principal's neglect.
185. The principal must make
compensation to his agent in respect of injury caused to such agent by the
principal's neglect or want of skill.
Enforcement and consequences of agent's contracts.
186. Contracts entered into through an
agent, and obligations arising from acts done by an agent, may be enforced in
the same manner, and will have the same legal consequences, as if the contracts
had been entered into and the acts done by the principal in person.
Principal how
far bound when agent exceeds authority.
187. When an agent does more than he is authorised to do, and when the part of what he does, which
is within his authority, can be separated from the part which is beyond his
authority, so much only of what he does as is within his authority is binding
as between him and his principal.
Principal not
bound when excess of agent's authority is not separable.
188. Where an agent does more than he is
authorised to do, and what he does beyond the scope
of his authority cannot be separated from what is within it, the principal is
not bound to recognise the transaction.
Consequences of notice given to agent.
189. Any notice given to or information
obtained by the agent, provided it be given or obtained in the course of the
business transacted by him for the principal, shall, as between the principal
and third parties, have the same legal consequences as if it had been given to
or obtained by the principal.
Agent cannot
personally enforce, nor be bound by contracts on behalf of principal. Presumption of contract to contrary.
(1) In the absence of any contract
to that effect, an agent cannot personally enforce contracts entered into by
him on behalf of his principal, nor is he personally bound by them.
(2) Such a contract shall be
presumed to exist in the following cases-
(a) where the contract
is made by an agent for the sale or purchase of goods for a merchant resident
abroad;
(b) where the agent does
not disclose the name of his principal;
(c) where the principal,
though disclosed, cannot be sued.
Rights of parties to a contract made by agent not disclosed.
(1) If an agent makes a contract
with a person who neither knows, nor has reason to suspect, that he is an
agent, his principal may require the performance of the contract; but the other
contracting party has, as against the principal, the same rights as he would
have had as against the agent if the agent had been principal.
Where principal discloses himself before completion of contract.
(2) If the principal discloses himself before the contract is completed, the other
contracting party may refuse to fulfil the contract,
if he can show that, if he had known who was the principal in the contract, or
if he had known that the agent was not a principal, he would not have entered
into the contract.
Performance
of contract with agent supposed to be principal.
192. Where one man makes a contract with
another, neither knowing nor having reasonable ground to suspect that the other
is an agent, the principal, if he requires the performance of the contract, can
only obtain such performance subject to the rights and obligations subsisting
between the agent and the other party to the contract.
Right of person dealing with agent personally liable.
Consequence
of inducing agent or principal to act on belief that principal or agent will be
held exclusively liable.
194. When a person who has made a
contract with an agent induces the agent to act upon the belief that the
principal only will be held liable, or induces the principal to act upon the
belief that the agent only will be held liable, he cannot afterwards hold
liable the agent or principal respectively.
Liability of pretended agent.
Person
falsely contracting as agent not entitled to performance.
Liability of principal inducing belief that agent's unauthorised
acts were authorised.
197. When an agent has, without
authority, done acts or incurred obligations to third persons on behalf of his
principal, the principal is bound by such acts or obligations if he has by his
words or conduct induced such third persons to believe that such acts and
obligations were within the scope of the agent's authority.
Effect, on agreement, of misrepresentation or fraud by agent.
198. Misrepresentations made, or frauds
committed, by agents acting in the course of their business for their
principals, have the same effect on agreements made by such agents as if such
misrepresentations or frauds had been made or committed by the principals; but
misrepresentations made, or frauds committed, by agents, in matters which do
not fall within their authority, do not affect their principals.
Section 247 of this Law which repealed the Commercial Code (Amendment)
Law 1917 and some provisions of the Mejelle and the
Ottoman Commercial Code, provided that such repeal should not, and that nothing
in the Law should, affect:-
(a) any contract, agreement, bond or
instrument entered into, made or executed before the coming into operation of
this Law; or
(b) any right or
interest acquired or accrued under the provisions of any enactment repealed by
this Law; or
(c) any legal
proceeding or remedy in respect of any such contract, agreement, bond,
instrument, right or interest.
Primary
Source: http://www.wipo.int/clea/en/text_html.jsp?lang=EN&id=928