Question

Lumber Agents Ltd., which frequently acted as an agent for wood processing mills, was contacted by the Finished Flooring Ltd. to find a supply of a particular hardwood for its new product line. Under the terms of the agreement, Lumber Agents Ltd. was entitled to a flat commission rate based upon the quantity of lumber purchased. Lumber Agents Ltd. contacted several small mills and arranged for each to supply a quantity of the type of hardwood required by Finished Flooring Ltd. In each case, Lumber Agents Ltd. charged the mill a fee for arranging the supply contract. In due course, the wood was delivered to Finished Flooring Ltd., and the agreed upon commission was paid to Lumber Agents Ltd., based upon the quantity of hardwood supplied. Some time later, when Finished Flooring Ltd. discovered that Lumber Agents Ltd. had also charged a fee to the other mills for arranging the supply contracts, it took legal action against Lumber Agents Ltd. Discuss the nature of the claim that would be made by the Finished Flooring Ltd. and the defences, if any, of the Lumber Agents Ltd. Render a decision

Answer 1

nature of claim:

Finished flooring under this can claim that lumber agents have charge double fees from them as well as from the other suppliers for arranging the supplies of the wood products. They consider this as an agent exceeding his rights in performing his obligation. But finished flooring could have directly reached out to the suppliers directly for supply of wood products instead of reaching out to lumber mills. So in this case we can consider lumber mills only as a middleman.

Lumber mills can protect itself by arguing that it only acted as a middleman for finished flooring and it can’t be considered as guilty for its actions performed as it just wants to make use of the opportunity that it came its way to act as a middleman and made some small benefit out of that.