i) Actual authority is created by words, either written or oral. It often derives from a contract between the principal and agent, although an agent may act gratuitously. This is the level of authority for which the agent is entitled to receive his remuneration or commission. The agent does not have to act in excess of his authority, lest he may be liable to the principal for breach of the agency.

Actual authority may be either express or implied. Where the agency has been created by a written contract of agency, the scope of the express authority can be determined from the construction or wording of the document. In an oral agency agreement, it will depend on what the parties agreed the agent should have the authority to do.

Implied authority is sometimes divided into Usual Authority and Customary Authority. Usual authority is a more specific form of implied authority which relates to agents of a certain type acting in the “usual” way of such agents.

Customary Authority derives from the locality, market, or business usage.

(5 marks)

ii) An agent is a person who is authorized to act for another (the principal) in making legal relations with third parties. If the agent acts within the scope of his actual authority, the contract will be valid and binding on the principal.

In the current scenario, Kwei Aglote acted within the scope of his actual authority in his contract with Ogyeene Baby. The contract is that of Batis Brown and is binding on him.

(5 marks)