Agents and Brokers Revisited

Transcription

1 Agents and Brokers Revisited Grain Trade Australia Advisory & Compliance Workshop 29 July 2013 Jeremy Rosenthal, Principal, SBA Law We know Agri.

2 Agency Defined There is no single definition for the legal concept of agency but in all cases the central concept is of a party (Principal) acting through another (Agent) being deemed to act in person. The narrowest definition imports an authority to create legal relations between the principal and third parties. From this narrow base, the scope of the agency will be framed by the authority granted by the principal and by the law and surrounding industry rules which govern the circumstances in which the agency arises. We know Agri. 2

3 Brokers Generally In the most general sense a broker is a class of agent who does not have possession of the goods and does not sell in his or her own name. The broker s role is said to be confined to the negotiation of contracts for sale and purchase. Examples include stockbrokers, insurance brokers and finance or mortgage brokers. We know Agri. 3

4 Intermediaries Facilitating a transaction is not by itself agency, nor will agency follow because a person is an introducer of business or the recipient of a commission for a service. The critical question is whether the intermediary: has the authority to represent a party for the purposes of soliciting business; and is obligated to exercise any discretion. We know Agri. 4

5 Definition of Broker A person, firm or electronic trading platform engaged or used by others, at least partially on a commission basis, to facilitate contracts under instructions from Buyers and Sellers, relative to goods to which it does not have actual or constructive permission. We know Agri. 5

6 Application Under the GTA Rules The broker s legal capacity as an intermediary not an agent under the general law between the buyer and the seller is confirmed. The broker s role is differentiated from a commission agent and other agents. The broker is afforded limited liability to the transaction parties. The confirmation prepared by the broker, in the absence of other action, applies. We know Agri. 6

7 Powers A Broker has the power to bind two principals only to the extent of their instructions and the principals are not liable for any acts of the Broker in excess of such instructions. The Broker does not act as agent for either party. We know Agri. 7

8 Definition of Broker A person is not a Broker: who has possession and absolute control of goods supplied to him to sell and collect the price. (Therefore, a Commission Agent to whom a commodity is consigned for sale is not a Broker.) who only acts for one principal to the exclusion of all others. We know Agri. 8

9 Liability A Broker who, in good faith, negotiates a contract which is in accordance with instructions from both principals, who, at the time of negotiations, advises each principal the name of the other, and who completes such negotiations in accordance with the rules and customs governing such transaction, thereby fulfils all obligations and has no further liability to either of the principals. We know Agri. 9

10 Liability A Broker who, in good faith or otherwise, exceeds his authority is liable for resulting damages. We know Agri. 10

11 Broker s Note A Broker s Note shall be prima facie evidence of the terms of the contract between the parties. To the extent of any inconsistency between a Broker s Note and a document generated by a party, the Broker s Note shall prevail. We know Agri. 11

12 We know Agri. Grain Livestock Forestry Fruit & Vegetable Marketing Trade & Transport Water Rights Corporate Governance Foreign Investment Commercial Transactions Litigation Alternative Fuels Environmental Law Funds Management Private Equity Corporate Farming PPSA, Banking & Finance Employment Law Capital Raisings We know Agri. 12

13 Contact: Jeremy Rosenthal Direct: Mobile: Web: We know Agri. 13