Group 2 ( Wendy Okengo, Deborah Gichuru, Erica Ogolla, Marseli Mitchelle, Michael Mwalii,

Samuel Mungai and Winnie Bitutu Nyangoto)

Questions: With reference to the material we have covered (mandatory) and any other material
you may deem relevant (optional):

I. In what circumstances, if any, may an agent delegate the performance of their duties?
(5 marks)
II. Discuss fully the hirer's right (or lack thereof) to cancel or terminate a hire-purchase
agreement. (5 marks)

Instructions:

Submissions online. Ms Word, calibri 11 1.5 spacing. Minimum 3 maximum 5 pages.

Question 1:

In what circumstances, if any, may an agent delegate the performance of their duties? (5 marks)

An agent is a person who is authorized by another person (the principal) to act on their behalf in
dealings with third parties. The agent has the power to bind the principal to contracts and other
legal obligations.

When appointing an agent, the principal anticipates him to act directly and not indirectly through
others. Therefore, it is a well-established principle of agency that an agent cannot delegate his
duties to others unless the principal had consented to such a delegation at the time of the agent's
appointment.
‘Delegatus non potest delegare’ is a Latin maxim that literally translates to "one to whom authority
has been delegated may not delegate it to another."
In other words, the principal has the right to rely on the expertise and knowledge of the agent he
has chosen and to profit from those qualities.

An agent may however delegate the performance of their duties in the following exceptional
circumstances;
 1. If the principal has expressly authorized the agent to delegate

This is the most common way for an agent to delegate their duties. The principal can give this
authorization explicitly, or it can be implied from the circumstances. For example, if the agent is
appointed to sell a house, the principal may implicitly authorize the agent to delegate the task of
showing the house to potential buyers.

2. If the delegation is customary in the industry

In some industries, it is customary for agents to delegate their duties to third parties. For example,
it is common for real estate agents to delegate the task of showing houses to potential buyers to
other agents. In these cases, the principal will be bound by the acts of the sub-agent even if they
have not expressly authorized the delegation.

3. If the delegation is necessary to carry out the agent’s duties.

This is a limited exception to the rule as an agent can only delegate their duties if it is necessary to
do so in order to carry out their instructions from the principal. For instance, if an agent is
appointed to purchase goods on the principal's behalf, the agent may delegate the task of
inspecting the goods to a third party if it is necessary to do so in order to make a decision about
whether to purchase them.

4. If the delegation involves ministerial tasks.

Ministerial roles are distinct from discretionary roles which involve making judgments and decisions
based on the agent's interpretation of the principal's interests. Discretionary roles may involve
negotiating contracts, making strategic decisions, and exercising independent judgment unlike
signing a letter or completing a form giving notice in situations where it is not a skill or confidence-
requiring act. Allam & Co Ltd versus Europa Poster Services, All ER 826 (1968).

5. If the principal has approved or ratified the delegation.

It is without a doubt valid if the principal has agreed on the delegation. In De Bussche v. Alt (1878)
8 Ch. D, 286, the agent exercised caution by getting the principal's approval.
Question 2:

Discuss fully the hirer's right (or lack thereof) to cancel or terminate a hire-purchase agreement.
(5 marks)

A hire-purchase agreement is a contractual arrangement where the hirer hires goods from the
owner for a specific period of time, with the option to purchase the goods at the end of the
agreement. In such agreements, the hirer generally has certain rights to cancel or terminate the
agreement. The hirer's rights and their potential limitations within the context of canceling or
terminating a hire-purchase agreement are subject to provisions outlined in the Hire Purchase Act.
This legislation aims to partially safeguard the interests of the hirer, employing three distinct
mechanisms:

1. Contents of the Hire Purchase Agreement: Section 7 of the Hire-Purchase Act designates certain
provisions as void if they appear in a hire-purchase agreement. These include:

1. Provisions granting the owner or their agent the authority to repossess the goods on the
premises.
2. Provisions absolving the owner from liability for such repossessions.
3. Provisions limiting the hirer's right to terminate the hire-purchase agreement as per Section
12(1).
4. Provisions imposing greater liability on the hirer for terminating the agreement compared
to Section 12(1).
5. Provisions deeming individuals representing the owner in forming the agreement as agents
of the hirer.
6. Provisions relieving the owner from accountability for actions taken by representatives
regarding the agreement's formation.
2. Implied Terms: The Hire Purchase Act incorporates both conditions and warranties into all Hire
Purchase Agreements. These include:

○ Conditions:
1. The implied condition that the owner possesses the right to sell the goods
upon property transfer, per Section 8(1)(a).
2. Unless explicitly stated otherwise, an implied condition that the goods are of
merchantable quality, under Section 8(1)(d).
3. If the hirer communicates the intended purpose of the goods to the owner,
an implied condition that the goods should reasonably fulfill that purpose, as
per Section 8(2).
4. Other conditions may also be implied by other applicable laws.

3. Repossession of Goods (Section 15):

Section 15(1) of the Hire Purchase Act introduces a critical safeguard for hirers who have
made significant payments toward the hire-purchase price. This provision restricts the
owner's ability to repossess the goods without resorting to a court process once the hirer or
someone on their behalf has paid 2/3 of the total hire-purchase price. This clause was
introduced to counteract the practice known as "snatch back," where owners could reclaim
goods without warning, leaving hirers vulnerable.

Benefits and Consequences:

1. Hirer Protection: The primary intention behind Section 15(1) is to provide a degree of
security to hirers who have demonstrated a substantial commitment by making payments
amounting to two-thirds of the total hire-purchase price. This protection ensures that hirers
are not left empty-handed after making substantial financial contributions toward the
goods.
2. Termination and Liability Nullification: If the owner repossesses the goods in violation of
Section 15(1), the hire purchase agreement is deemed terminated. This means that the hirer
 is no longer bound by the terms of the agreement and is absolved of any further liability
under it. This measure grants hirers a significant level of relief, preventing them from being
held accountable for obligations they can no longer fulfill due to repossession.
3. Payment Reclamation: The hirer gains the right to recover all sums they have paid under
the agreement or any associated guarantee contract. This provision seeks to rectify the
financial burden placed on the hirer by restoring the payments they've made, effectively
refunding them for their contributions.
4. Guarantor Protection: Similarly, any guarantor associated with the agreement is entitled to
recover any payments they have made under the guarantee contract or any provided
security. This provision extends the protection to guarantors, acknowledging their role and
potential financial exposure in the transaction.

Limitations and Criticisms:

However, there are certain limitations and criticisms associated with this provision:

1. High Payment Threshold: One key critique is that the hirer must pay a significant portion
(2/3) of the hire-purchase price before enjoying the protection of Section 15(1). This might
be financially burdensome for some hirers, and until this threshold is met, they remain
susceptible to repossession.
2. Delayed Property Transfer: Despite meeting the payment threshold, the hirer does not
necessarily gain ownership of the goods. The property's transfer is contingent on the
agreement's terms, and this can leave the hirer in an uncertain position even after meeting
the required payments.
3. Court's Discretion: Courts can still exercise discretion and potentially order the repossession
of goods under certain circumstances. This discretion might diminish the effectiveness of
the protection offered by Section 15(1) in cases where the court deems repossession
justifiable.

Therefore, while Section 15(1) of the Hire Purchase Act offers a level of protection to hirers who
have made substantial payments, its efficacy can be influenced by the financial burden, the timing
of property transfer, and the court's discretion. The provision seeks to balance the interests of both
hirers and owners in the complex landscape of hire-purchase agreements.