Singapore Commercial Law – Agency Law Part 1 (Employment)

Imagine you are a proud entrepreneur and owner of a new bakery. A customer pays your cashier a buck for a piece of bread and your cashier immediately runs out of the shop with the money. Will you be held responsible? What happens if another customer who wants to avoid the queue hands some money to your baker instead? Are you still accountable if it is the baker who runs away?

Disclaimer

This article is written with the understanding that the author and SGEntrepreneurs is not engaged in rendering legal or any other professional advice. The author is not professionally trained in law and cannot and will not guarantee the accuracy of the information contained herein. The author disclaim any responsibility for any loss or liability that is incurred for using this article

Definations

Before we answer this question, let us visit the legal definition of an AGENT. Loosely speaking, an agent is someone who has the power to affect the legal position of another. This means that the agent is able to make contacts, collect money etc. AGENT here does not have the same meaning when it is used by the layman.

An example of AGENT used by layman is this:” Cycle and Carriage is often referred to as an agent in Singapore for Mercedes Benz.” However, legally, they are resellers not agents.

The power or authority of an agent is differentiated into 3 kinds.

Expressed Authority

This is the simplest and the most definite. Expressed authority arises when instructions are given to the agent by the principle (you, the boss). Example, you command your worker to buy a packet of rice. Obviously, this worker has the power to buy rice and upon buying, you are liable to pay for it.

Implied Authority

Implied authority could arise from the position of the agent. You, the boss is overseas. Does your manager need to ask you if can buy 20 dollars worth of stationary? Usually, it is implied that a Manager has this power even without you giving ‘expressed’ power.

Therefore, if you are a control freak, you better restrain you manager explicitly if you are afraid of even spending 20 bucks.

Expressed and implied authority are cases of actual authority given to the agent. This means that as long as your agent acts within his authority, you can’t sue him.

Apparent Authority

Ostensible authority or apparent authority refers to the authority that someone appears to have.