Ireland v Livingston
An agent who acts in good faith on a reasonable interpretation of ambiguous instructions is not in breach of his duty, even if it was not the interpretation the principal intended.
Facts
Mr Livingston, a merchant in England, received an order from Mr Ireland, a merchant in Mauritius, to buy 500 tons of sugar, with the words 50 tons more or less of no moment, if it enables you to get a suitable vessel. Mr Livingston bought 400 tons and shipped it, intending to ship the rest later. Mr Ireland refused to accept the sugar, arguing that he had ordered it to be shipped in one cargo.
Legal principle
The House of Lords held that Mr Ireland was bound to accept the sugar. Lord Chelmsford said that, if a principal gives an order to an agent in such uncertain terms as to be susceptible of two different meanings, and the agent bona fide adopts one of them and acts upon it, it is not competent to the principal to repudiate the act as being unauthorised because he meant the order to be read in the other sense. The instructions were ambiguous, and Mr Livingston had acted reasonably and in good faith.
Related cases on agency
- Armagas Ltd v Mundogas SA (The Ocean Frost) [1986] AC 717
- Bolton Partners v Lambert (1889) 41 Ch D 295
- Collen v Wright (1857) 8 E & B 647
- De Bussche v Alt (1878) 8 Ch D 286
- First Energy (UK) Ltd v Hungarian International Bank Ltd [1993] 2 Lloyd's Rep 194
- Freeman & Lockyer v Buckhurst Park Properties (Mangal) Ltd [1964] 2 QB 480
- Hely-Hutchinson v Brayhead Ltd [1968] 1 QB 549
- Hippisley v Knee Brothers [1905] 1 KB 1
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