chapter  12
Pages 15

At common law, the principal/agent relationship may arise in a variety of circumstances, for instance where an agent is appointed to negotiate a contract for the sale of goods on behalf of his principal, or to execute a conveyance of land; also, there are specialist agents who are qualifi ed to perform specifi c functions, such as auctioneers, attorneys and solicitors, brokers, factors and real estate agents. In addition to these species of agent, whose relationships with their principals and the third parties with whom they have dealings are governed by the law of contract, there is also the wellknown principal/agent relationship which arises in the law of tort where a ‘casual agent’ drives a motor vehicle for some purpose for the owner of the vehicle. 1

As far as the law of contract is concerned, the basic function of an agent (A) is to establish a contractual relationship between his principal (P) and a third party (T) and, having done so, he normally ‘drops out of the picture’, leaving P and T bound by a contractual obligation.