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Watteau v Fenwick (1893)

Facts

  • A pub owner named Humble appeared to own and manage a pub
  • Humble in fact acted for an undisclosed principal, when he ordered cigarettes from the claimant, and failed to pay for them
  • Humble was not authorised to purchase cigarettes by virtue of his actual authority
  • Apparent authority and undisclosed principals are incompatible

Issue

  • Was the undisclosed principal liable to the cigarette vendor?

Decision

  • Yes

Reasoning

  • Purchasing cigarettes was within the range of acts usually carried out by a landlord, therefore the defendants were bound
  • Opinion: this case undermines the doctrine of apparent authority, as there is no apparent possible source for the representation: at the time of the purchase of cigarettes, the principal did not exist and so obligations could not be conferred thereon; it is either plainly wrong, or there is an alternate justification for apparent authority which has not since been mentioned in litigation
  • Tettenborn’s justification circumvents agency law altogether:

    [The agent] and the owner of the Victoria Hotel (whoever that might be) were one and the same person [and the same legal entity]

    (Cambridge Law Journal 1998, Page 274)

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