The issue in this situation is whether Tan can claims the loss against Allan or not.

The principle of law that related in this situation is agency by necessity. In section 142 contract
act 1950, an agent has the authority if have an emergency situation to do all acts to the purpose to
protecting the principle from losses. It means any person can become an agent by necessity without
formal appointments with principal if have any emergency situation to protecting the principal from
losses. In agency b necessity have 5 types of conditions. First, have contract relationship with purpose
in the beginning. For example, contract to deliver a good. In case Great Northern Railway company v
Swaffield , the plaintiff, railway company carried the defendant horse to its destination. On arrival there
was no one to meet. Since the station master did not know the defendants address, he instructed that
the horse to be put in stable. Later, the railway company claimed for the stabling charges from the
defendant. The defendant refuses to pay. In held, the railway company had acted as agent of necessity.
The horse need to be kept safe in the stable. Therefore the claim was successful. In additional, must
have in real emergency situation. In case Phelps James Company V Hill, agency by necessity does not
arise if there is no real urgency for example where the goods are sold because they were inconvenient
from the principle. It is impossible for the agent to communicate and get further instruction from the
principle. But, agent must use all reasonable diligent to communicate with his principle. In cases
Springer V Great Western Railway Company. The defendant was supposed to carry the goods
(tomatoes) to its destination, sold the goods in the middle of the journey without trying to communicate
with the owner when it is possible to do so. Held in, no agency by necessity. In condition four, do things
because wants to prevent the principle from losses and last condition is, the agent must acted in good
faith and reasonable in the circumstances. Good faith means god intention, not because of personal
interest. Law of agency is governed under Part X of the contract Act 1950. Agency is any person doing
any act to another. Principle is a person whom is such act to be done. In effect, law of agency is
between principle and agent and law of contract is between principle and 3rd party. The qualification,
principle under section 136 contract act, principle must in age of majority and sound mind. Agent in
section 137 contract acts, any person may become an agent but an agent who is minor or unsound mind
is not responsible for his act.

Application in this situation, Allan is a agent and Tan is a principle. This is emergency situation in
this situation and can apply section 142 Contract Act. Tan give the instruction to Allan to delivery a
goods from Cameron highland to Penang. But, the lorry that was driving was badly damaged when it
was involved in a road accident near Butterworth. Allan take action to sold the goods with half price
without permission. In this situation it is related with case Springer V Great Western Railway Company
because Allan not try to communicate with Tan before do the decision. This action no agent with
necessity. Tan can sue Allan with the action.

In conclusion, this is no agent of necessity because Allan sold the goods without the permission
from Tan.