Gavin was working for ToyzRU as a procurement manager. The company requested him to source for and purchase a second-hand van for its deliveries of toys to its customers. In a meeting with the company’s director, Gavin was instructed that the second-hand van should be in good condition. He was hesitant about this task that was assigned to him as he knew very little about vehicles. He bicycled to work daily and the only experience he had with vehicles was watching car commercials. However, Gavin did not share his concerns with the company’s director as he wanted the company to have a good impression of his capabilities.
After a few weeks of visiting car dealers, Gavin managed to find a second-hand van. He noticed that the bonnet and bumper were dented. However, he was in a rush and hence, did not make any enquiries about the dents. He simply passed his name card (which states his name, job title and office contact details as well as the company’s name) to the car dealer. After completing the details in the contract for the purchase of the van, the car dealer signed the contract and then passed it to Gavin for signature. Gavin signed it, writing above his signature “for and on behalf of ToyzRU”. The van was then delivered to the company.
A week later, the van failed to start. A mechanic confirmed that the van suffered from a number of serious mechanical defects because it was previously involved in an accident and was repaired poorly. ToyzRU is now claiming that the contract (which Gavin signed on its behalf) is invalid because he did not follow its instructions to purchase a van that was in “good condition”.
(a) Analyse and conclude whether the contract that was entered into by Gavin (on behalf of ToyzRU) and the car dealer is valid and binding. In your analysis, you should identify and discuss the relevant relationship between Gavin and ToyzRU.
(b) Discuss whether Gavin had breached any agency duties and if yes, give examples of duties that have been breached.
The question belongs to Law and it discusses about legal persons and whether or not the actions of agents of legal persons is binding on legal persons.
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