In the following chapters the principal has been identified as (P), the agent as (A), the third party as (T) and the undisclosed principal as (UP).

1.1.1 Express actual authority

Hely-Hutchinson v Brayhead (1968) CA Hely-Hutchinson (T) was the managing director of a struggling company, Perdio. Brayhead (P) were considering a takeover of Perdio in the medium term future. Richards (A) was the chairman of Brayhead. He also acted as de facto managing director with the acquiescence of Brayhead’s board, concluding contracts without the board’s express consent. Hely-Hutchinson proposed to Richards that he (Hely-Hutchinson) would inject money into Perdio (to keep it alive until Brayhead was ready for the take-over) if Brayhead would indemnify him. Richards agreed to this and, in his capacity as chairman of Brayhead, sent letters of indemnity to Hely-Hutchinson. Accordingly, Hely-Hutchinson advanced money to Perdio. Nonetheless,

Perdio became bankrupt, so Hely-Hutchinson sought the indemnity from Brayhead. Brayhead resisted the claim stating that Richards had no actual authority as chairman to give such an indemnity.