MOUNT KENYA UNIVERSITY

SCHOOL: BUSINESS AND ECONOMICS

DEPARTMENT: MANAGEMENT

UNIT TITLE: BUSINESS LAW

UNIT CODE: BAF2105

VIRTUAL CAT
Chacha and Chichi are Business law students at MKU. After class, Chichi said that he now

knew that an agent must perform his duties personally; period! Chacha laughed at him

and told him that she is among those students who are not keen in class and the position

was that an agent can sometimes appoint another person to perform the task he has been

given by the principle and the law recognized this. Explain who was right and support your

explanation with examples (15 Marks)

Both Chichi and Chacha are partially correct, but Chacha's statement is more accurate in the

context of business law. An agent can indeed appoint another person to perform tasks on their

behalf, but there are certain limitations and legal considerations to keep in mind. Let's delve

deeper into the concept of agency and the ability to delegate tasks.

In business law, an agent is an individual who acts on behalf of another person, known as the

principal, to conduct business or legal transactions. The agent's actions are legally binding on the

principal as long as they are within the scope of their authority.

Chichi's statement, asserting that an agent must perform their duties personally, reflects a

common misconception. While it is true that an agent is typically expected to personally carry

out their obligations, there are situations where delegation is permissible. This is known as the

concept of "delegatus non potest delegare," which means "a delegate cannot delegate."

However, there are exceptions to this rule, and the law recognizes certain circumstances where

an agent can appoint another person to perform their tasks. These exceptions include:

Customary delegation- In some industries or business practices, it is customary for agents to

delegate certain tasks. For example, a sales agent may appoint a subcontractor to deliver goods
or services on their behalf. This delegation is allowed if it aligns with industry practices and does

not conflict with the agent's duties.

Implied authority to delegate- The principal may grant the agent the implied authority to delegate

tasks. This authority can be inferred from the nature of the relationship between the principal and

the agent or from the agent's previous actions with the principal's knowledge and consent.

Express authority to delegate- The principal may explicitly grant the agent the authority to

appoint another person to carry out specific tasks. This grant of authority can be stated in the

agency agreement or through subsequent consent given by the principal. For example, lLet's say

there is a company called ABC Manufacturing that manufactures and sells electronic devices.

The company appoints John as their sales agent to promote and sell their products to retailers. In

the agency agreement between ABC Manufacturing and John, there is a specific clause that

explicitly grants John the authority to appoint sub-agents to assist him in the sales process.

John, as the appointed agent, decides to delegate some of his tasks to Sarah, who is an

experienced salesperson. He informs ABC Manufacturing about his intention to appoint Sarah as

a sub-agent to handle certain territories and retail accounts. ABC Manufacturing agrees to this

arrangement, as it trusts John's judgment and understands that the use of sub-agents can enhance

their sales efforts. In this scenario, John has express authority to delegate his sales tasks to Sarah

based on the agency agreement. The agreement explicitly grants him the authority to appoint

sub-agents, and ABC Manufacturing has consented to this delegation. By doing so, John can

effectively distribute his workload, expand the company's sales reach, and utilize Sarah's

expertise in specific territories.

have the authority to appoint a lawyer to review the contract terms on her behalf. The lawyer's

actions would be legally binding on the principal, and Chacha would still be accountable for

overseeing the lawyer's work and ensuring its alignment with the principal's interests. It is

important to note that even when delegation is permissible, the agent remains responsible for the

actions of the appointed person. The agent must exercise reasonable care in selecting a

competent delegate, ensure that the tasks are performed in accordance with the principal's

instructions, and monitor the delegate's actions to ensure compliance.

Danty is the proprietor of Danty Dailies, which published an article two weeks ago to the

effect that Mr. Chege the managing director of Child Welfare Organisation had embezzled,

Sh. 5 million from the organization to purchase a private residential house for himself and

family. Investigations have revealed that Mr. Chege bought the house out of a loan of Sh. 6

million advanced to her by Tajiri Bank and secured on the house. Mr. Chege is aggrieved

and seeks your legal advice. (15 Marks)

Mr. Chege should explore the possibility of suing Danty for defamation. Defamation is the act of

harming a person’s reputation through the use of words and is broken into two categories. When

defaming words are in writing this is known as libel; if the words are spoken, this type of

defamation is called slander.

Mr. Chege should make sure that he can prove the five elements of defamation in a court of law.

The five elements of defamation include:

Publication of information- In order for a statement to constitute defamation, it must be

published. In other words, while someone may write something harmful or untrue about another
person in a private location such as a journal, this document is not intended to be shared with the

public, and therefore can not be considered defamatory. “Published” can mean any type of

publicly accessible medium; libel may be printed in a magazine, and slander could be found in a

television interview.

The person being defamed was identified by the statement- The second element that is required

to prove defamation is identification. The one being defamed, that is the plaintiff, must be

identifiable from the statement such that it can only apply to that person. The identified person

may be addressed directly, such as by name, or indirectly, such as by a role in an organization. If

there is only one CEO of a company and an individual makes a slanderous claim about the CEO

of that company without mentioning a name, the target of the statement is still made clear.

The remarks had a negative impact on the person’s reputation- In order for words or speech to

qualify as defamation, they must negatively affect how a person is perceived by the public or

others with whom they interact. It is insufficient to prove that the published words were false,

they must harm to reach the burden of proof. The person being defamed may, for example, lose

opportunities for employment or financial security as a result of other people receiving

defamatory information. The plaintiff may have trouble securing a job or keeping their current

job if their employer received information that they are untrustworthy, dangerous or some other

negative quality that was posited in the defamatory remarks. If someone published libel that

stated that an actor was notorious for stealing money or property on set, that actor may struggle

to find future work and as a result, their income stream could be compromised.

The published information is demonstrably false- Defamation occurs when a false claim about

someone is made. In order for a statement to constitute defamation, it must be both false and

provable. Making the statement that your boss cheated on his wife is not defamatory if he did, in
fact, cheat on his wife; the statement is true, regardless of whether it is uncomfortable or

unprofessional. However, if the information can be proven false, this means that one person is

sharing incorrect information about another person whose life is being negatively impacted by

the misinformation. However, it is important to note that a statement may be taken to mean

something false and defamatory, even if it is not what was expressly stated.

The defendant is at fault- Finally, in order for a statement to legally qualify as defamation, the

person accused of defamation must actually be at fault. There are some scenarios in which a

defamatory statement is not the fault of the person who originally spoke or wrote it. For example,

an individual who offers a television interview who is later misquoted may not be liable for

defamation. While their original words were the basis on which the defamatory information was

shared, their original words themselves were not defamatory; instead, it was the misquoted

statement that defamed the individual, and so the original speaker or writer is not liable for

defamation based on how their words were used.

Apart from suing for defamation, Mr. Chege should consider suing Danty for false accusations

and privacy and confidentiality. If Mr. Chege can prove that the allegations of embezzlement

made by Danty Dailies are false, he may also have a legal basis to pursue a claim for malicious

prosecution or false accusations. These claims generally require demonstrating that the

accusations were made with malice or a reckless disregard for the truth. Mr. Chege could also

explore whether his privacy rights or the confidentiality of his financial dealings were violated

by the publication of the article. This may involve considering any applicable data protection

laws, privacy policies, or contractual agreements in place between Mr. Chege and Child Welfare

Organisation.
REFERENCES

Beatty, J. F., Samuelson, S. S., & Abril, P. (2021). Business law and the legal environment.

Cengage Learning.

Bowie, N. E. (2020). Business Ethics. In New Directions in Ethics (pp. 158-172). Routledge.