The Ocean Frost [1986]

Armagas Ltd v Mundogas SA (The Ocean Frost) [1986]

Facts

  • Amidst apparent fraud, an agent purported to conclude an agreement leasing a ship back from its buyer (the principal) for a period of 3 years
  • The agent only had actual authority to conclude an agreement which lasted for 1 year
  • The agent claimed that he had obtained specific authority for the transaction
  • The agent was appointed as the principal’s chartering manager

Issue

  • Was the principal bound by the agreement?

Decision

  • No

Reasoning

  • It follows orthodoxy that a principal may not represent his own authority
  • The agent’s title of ‘chartering manager’ did not bring with it the apparent authority to conclude the contract or represent specific authorisation
  • It is unusual for a principal to have to obtain specific authority for a particular transaction
RELATED CASE  The Moonacre [1992]

Posted in Commercial Law Revision Notes.

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