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Reasonable Reliance and Apparent Authority: East Asia Company Ltd v PT Satria Tirtatama Energindo [2019] UKPC 30

Research output: Contribution to journalArticle

Original languageEnglish
Number of pages7
JournalCommon Law World Review
Volume48
Issue number4
DOIs
DateAccepted/In press - 18 Oct 2019
DatePublished (current) - 1 Dec 2019

Abstract

The Privy Council in East Asia Company Ltd v PT Satria Tirtatama Energindo (a case on appeal from Bermuda) has provided clarification on the correct approach to the reliance aspect of apparent authority. Reliance can be of particular importance where the third party has been put on notice as to the agent’s lack of authority: e.g. when the transaction is unusual or especially onerous for the principal. The Privy Council concluded, albeit obiter, that the correct test is one of reasonable reliance by the third party. In doing so, it has rejected the approach adopted by Lord Neuberger NPJ in the Hong Kong case of Akai Holdings and subsequently followed in a number of English decisions: i.e. reliance by the third party is presumed in the absence of dishonesty or irrationality.

    Research areas

  • agency, apparent authority, reliance, company directors

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    Rights statement: This is the author accepted manuscript (AAM). The final published version (version of record) is available online via SAGE Publications at https://journals.sagepub.com/doi/full/10.1177/1473779519887761 . Please refer to any applicable terms of use of the publisher.

    Accepted author manuscript, 139 KB, PDF document

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