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Principals and Agents

In a case brought by celebrity chef Gordon Ramsay against his father-in-law the High Court has held that the agent (in this case the father-in-law) had sufficient authority to enter into a personal guarantee and indemnity contract on the principal's (Gordon Ramsay) behalf, based on the parties' twenty-year working relationship and their previous course of dealings.

-       Ramsay had left the management of his businesses wholly to his father-in-law and did not expect to be kept informed of the details of the business transactions, Ramsay knew that he was not being kept informed.

-       His agent utilised a signature machine to execute Ramsay's signature on legal documents, and the Court found that Ramsay was aware of this practice.

A dispute arose as to whether the agent had authority to commit Ramsay to the contract using the signature machine.

The judge found on the evidence that the parties' long relationship was one of total trust (strengthened by their family ties) and the father-in-law "plainly had extensive authority" to act on Ramsay's behalf in relation to the contract.

Further, Ramsay had previously given similar contractual undertakings through his father-in-law and there were no express or specific limitations on the agent's ability to deal with any business or contractual matters. The father-in-law had not exceeded his authority and Ramsay was, therefore, bound by the contract.

This case is a useful reminder for principals that they should create a clear record of the scope of their agents' authority, in order to avoid and/or manage similar disputes. It also illustrates that signature machines can effectively bind a party to an agreement if there was appropriate authority to use it.

If you would like to speak to someone about this or any other related matter contact us on 01274 306 000.

About the Author

James Staton

Partner

James is a Partner and Head of the Dispute Resolution team and primarily handles commercial…

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