The law of agency in South Africa regulates the performance of a juristic act on behalf or in the name of one person ("the principal") by another ("the agent"), who is authorised by the principal to act, with the result that a legal tie (vinculum juris) arises between the principal and a third party, which creates, alters or discharges legal relations between the principal and a third party.Tolalisator Agency Board OFS v Livanos 1987 (3) SA 283 (W) 291.Mason v Vacuum Oil Co. of SA Ltd 1936 CPD 219 at 223.Whittal v Alexandria Municipality 1966 (4) SA 297 (F) 301.Stuart 1966 Annual Survey 99-100.Wanda (De Wet) "Agency" LAWSA 2 ed vol 1 § 176.See Gibson Mercantile and Company Law chap 6.See Wanda (DeWet) "Agency" LAWSA 2 ed vol 1. Kerr states that, in legal contexts, the word "agent" is most commonly used of a person whose activities are concerned with the formation, variation or termination of contractual obligations, and that agency has a corresponding meaning. It is the agent's position as the principal's authorised representative in affecting the principal's legal relations with third parties that is the essence of agency.
The term "agency" is sometimes used more broadly, to describe both the position of an agent as representative of a principal to perform juristic acts that affect the principal's legal relations with third parties, and also a relationship of mandate in which an "agent" is bound as mandatary to carry out some task for the principal as mandator.Wanda (De Wet) "Agency" LAWSA 2 ed vol 1 § 175. In general, the aim of the appointment of an agent is the performance of a service for the principal, but many besides agents perform services for another. One must therefore consider other characteristics when identifying the nature of agency. It is the substance of the relationship that is important: The essence of agency is that the agent is the principal's authorised representative in effecting the principal's legal relationships with third parties.
Agency, representation and mandate It is important to distinguish between the elements of representation and mandate.
Representation Hosten refers to agency and representation interchangeably. The latter, however, refers to instances of purely juristic representation: Representation entails one person's performing a juristic act on behalf of another.Totalisator Agency Board OFS v Livanos.Wanda (De Wet) "Agency" LAWSA 2 ed vol 1 § 176. The agent's ability, as representative, to affect the principal's legal relations is primarily derived from, and its extent determined by, the agent's authority to do so. "An act of representation," held Corbett JAA in Joel Melamed and Hurwitz v Cleveland Estates (Pty) Ltd; Joel Melamed and Hurwitz v Vorner Investments (Pty) Ltd,1984 (3) SA 155 (A). "needs to be authorized by the principal. Such authorization is usually contained in a contract." The authorisation of the representative is a distinct unilateral act. It is sometimes closely associated with an agreement between the parties, but may also arise by operation of law.Wanda (De Wet) "Agency" LAWSA 2 ed vol 1 § 175.De Villiers & Macintosh Agency 2-3. Although some representatives (such as public officials, company directors, guardians and curators) are often referred to loosely as agents, the current tendency is to reserve the term "agent" to denote a representative who is bound by contract with a principal to carry out a mandate and also authorised to create, alter or discharge legal relations for the principal.Whittal v Alexandria Municipality.De Villiers & Macintosh Agency 3.See, however, Wanda "Agency" LAWSA 2 ed vol 1 § 175.
This modern notion of an agent as representative—that is, as someone who enters into contracts for a principal on which the agent usually cannot be held personally liable—was not generally recognised in Roman law.Transvaal Cold Storage Co Ltd v Palmer 1904 TS 4 at 19.Zimmermann Obligations 45-56. The idea eventually came to form part of Roman-Dutch law,On the historical development of agency in South African law, see De Villiers & Macintosh Agency 4-13.See also De Wet (1942) 6 THRHR 99, 210.See Joubert "Agency and Stipulatio Alteri" in Zimmermann & Visser Southern Cross 335.See Zimmermann Obligations 45-58. although it was not developed to the same extent as the modern principles of commercial agency in England and America. As a result, South African courts have been greatly influenced by Anglo-American law in developing the South African law of agency.See Faure v Louw (1880) 1 SC 3 at 7.See Goodricke & Son v Auto Protection Insurance Co Ltd 1967 (2) SA 501 (W) 503-504.Lee Introduction to Roman-Dutch Law 310.Joubert Verteenwoordigingsreg 17-18.
Mandate Mandate (mandatum, Afr lasgewing) is a contract in which one person, the mandatary, undertakes to perform some lawful task for another, the mandator.Grotius 312.2.Voet 17.1.2.Van der Linden 1.15.14.3.See Pothier Mandat Prelim Art.See Mason v Vacuum Oil 222-224.See Blower v Van Noorden 1909 TS 890 at 897.Totalisator Agency Board DES v Livanos.See Joubert & Van Zyl (Van Zyl) "Mandate and Negotiorum Gestio" LAWSA First Re-issue vol 17.De Wet & Van Wyk Kontraktereg 386-389. In Roman-Dutch law, the contract was said to be essentially gratuitous.Joubert & Van Zyl (Van Zyl) "Mandate and Negotiorum Gestio" LAWSA First Re-issue vol 17 § 4 and the authorities cited there. If the parties agreed on a payment for the services rendered, the contract was one of letting and hiring of work or services: locatio conductio operisIn this type of contract, a piece of work (operis) is let out by the conductor to the locator. or operarum respectively.D 17.1.1.4.Grotius 3.12.6.Van der Linden 1.15.14.3.Huber 3.12.6.Pothier Mandat § 3.See, however, Voet 17.1.2. It was accepted in practice, however, that the mandator might offer a reward or honorarium, not in payment but in gratitude, for the mandatary's services.D 17.1.6 pr, 17.1.7, 17.1.36.1.De Villiers & Macintosh Agency 9.Totalisator Agency Board DES v Livanos. There is no objection in modern law to the remuneration of the mandatary, with the result that it is difficult to distinguish the contract of mandate from that of letting and hiring of work or services.See Kahn Contract and Mercantile Law I 849.Kerr (1979) 96 SALJ 323.Joubert & Van Zyl (Van Zyl) "Mandate and Negotiorum Gestio" LAWSA First Re-issue vol 17 § 5-6.
In Roman law, the mandatary was not the mandator's representative.For the mandatary's position in Roman law in this regard, see generally Zimmermann Obligations 45-56. Where the mandator concluded contracts with third parties in executing the mandate, the mandatary did so in his own name and not on the mandator's behalf. The rights and duties under such contract were the mandatary's alone. While the mandator could indirectly acquire rights against the third party by means of cession, he she could not do so directly.D 17.1.26.8.Totailsator Agency Board DES v Livanos.De Villiers & Macintosh Agency 7.Zimmermann Obligations 49-50. The position in modern law is different. The mandate may well include a power to represent the mandator, but it need not do so.Joubert & Van Zyl (Van Zyl) "Mandate and Negotiorum Gestio" LAWSA First Re-issue vol 17 § 2-3. For example, a person wishing to sell a house will often instruct an estate agent merely to find a suitable purchaser with whom the seller might conclude the sale personally, but may also authorise the estate agent to sell the property on the seller's behalf.The Firs Investment Ltd v Levy Bros Estates (Pty) Ltd 1984 (2) SA 881 (A).
Where the mandate involves, or is coupled with, a power (or authority) to represent the mandator, the mandatary is an agent.The Firs Investment v Levy Bros Estates 885.Totalisator Agency Board OFS v Livanos.Wanda (De Wet) "Agency" LAWSA 2 ed vol 1 § 175.Joubert & Van Zyl (Van Zyl) "Mandate and Negotiorum Gestio" LAWSA First Re-issue vol 17 § 6. The term "agent" is difficult to define, however, for it has a variety of meanings.Wanda (De Wet) "Agency" LAWSA 2 ed vol 1 § 175.Kahn Contract and Mercantile Law I 848-9. Sometimes it is used to denote the representation where the emphasis falls on the juristic relationship established by the agent between the principal and third party. At other times, it is used to refer to the contractual relationship between the principal and agent: the so-called "contract of agency" that in reality is a species of mandate.Totalisator Agency Board OFS v Livanos.Wanda (De Wet) "Agency" LAWSA 2 ed vol 1 § 175. Very often, the term is used in a broad sense to embrace both the contract between the principal and agent, and the concept of representation. This usage, while criticised,Wanda (De Wet) "Agency" LAWSA 2 ed vol 1 § 175.Kahn Contract and Mercantile Law I 849. is almost inescapable because both mandate and representation are obviously fundamental elements of the field of law generally referred to as the law of agency.Kerr Agency 2-10.
In modern commercial law, the agent is simply and solely the representative of the principal, on whose behalf the agent transacts with third parties. Such transactions are the principal's transactions. They inure to the principal's benefit or render the principal liable, as the case may be, without any benefit or liability attaching to the agent. The agent acts merely as a conduit to bring about a legal relationship between the principal and the third party.Blower v Van Noorden 899.
Agency and other contracts In SA law of contract: "independent contractor" normally used to mean conductor operis—one who's obliged to produce certain finished work.Kerr Agency 14. Smit v Workmen's Compensation Commissioner 1979 1 SA 51 (A) 58A, 61B, E; Lee, Roman Law, 320-321; Schulz 542; Thomas, Textbook, 296; Van Warmelo para 487; Van Zyl, Roman Law, 304-305; Zimmermann 393. Lee: distinction between sub-categories of locatio conductio "is not sharply drawn in the texts of Roman law." Schulz believes distinction should be abandoned altogether (544). See also ADE Lewis, "The Trichotomy in Locatio Conductio", (1973) 8 The Irish Jurist 164. Zimmermann: "It would be quite ahistorical to superimpose systematic distinctions over the Roman sources or to approach them with modem categories in mind. On the other hand, the Roman sources usually provide the historical foundation, the casuistic basis for these classifying and structuring efforts of the later civilians; and in order to prevent the modern lawyer from drowning in the flood of Roman case law, some sort of systematic life jacket appears to be indispensable" (340). Kerr: The distinction between the sub-categories "is firmly embedded in modern law. Even if it were to be abandoned the independent contractor's contract would still be locatio conductio and not mandatum" (Kerr 14). "Typical examples," as cited by Kerr, "are a builder who is obliged to complete a house or a building, a manufacturer who is obliged to build a ship, a weaver who is obliged to make cloth from wool supplied to him, and a person who is obliged to wash or mend clothes."Agency 14-15.