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

Finished flooring ltd claims that Lumber agents who acted as an agent and hence they can’t charge from other supply mills for arranging the supply of wood under the contract. Finished flooring if possible could have directly reached out to the other mills for the wood and they need not require lumber agents help. So lumber agents just acted as a representative of finished flooring and therefore got the commission.

Hence we can say here that lumber agents acted as a middleman in the situation and did not represent those mills and had spent lot of its time in reaching out to those suppliers. They could also argue that they had as agreement signed after the finished flooring contract that they are now their agents.

Therefore, we can conclude by saying that lumber agents can’t be considered as a guilty as they made use of an opportunity that came their way to act as a middleman and took advantage of it.