Priscilla Makoni v E Makiwa and Others

The applicant, a widow, sought to nullify an agreement of sale (cession) she entered into with the first respondent in February 2001 regarding Stand 9645 Budiriro 5B, Harare. The applicant had advertised the property and engaged the second respondent as her agent to facilitate the sale. The applicant claimed she instructed the agent to sell the property for $1,500,000.00, but the agreement was concluded for $950,000.00. She received $884,000.00 (after deduction of $46,000.00 commission) and later discovered the property had been registered in the first respondent's name. The applicant alleged fraudulent misrepresentation by her agent and sought nullification of the agreement. She admitted signing documents at the City of Harare's offices (fourth respondent) but claimed she believed she was signing papers to transfer the property from her late husband's estate into her name.

• Whether an agreement concluded through an agent can be nullified on the basis that the agent acted fraudulently or outside his mandate
• Whether the principal can avoid contractual obligations to third parties based on the agent's dishonesty or failure to carry out the mandate properly
• Whether there was a valid agreement when the applicant alleged no meeting of minds between the parties
• The extent to which third parties are bound by the agency relationship and its mandate

The application was dismissed with costs.

An act of an agent who has acted within the scope of his actual or apparent authority binds the principal, even where the agent has acted fraudulently or in furtherance of his own interests. Third parties who contract with an agent are not prejudiced by disputes between the principal and agent regarding the extent of the agent's mandate, provided the agent acted within the scope of apparent authority. A principal cannot rescind a contract with a third party on the basis of the agent's misrepresentation or failure to properly execute the mandate where the third party acted in good faith.

The court made observations about the applicant's inconsistent position, noting that despite seeking rescission in the draft order, the applicant's Heads of Argument and overall conduct suggested she was actually seeking variation of the contract terms to obtain a higher purchase price rather than genuine cancellation. The court also commented that it was highly unlikely that a purchase price would not have been agreed upon between the applicant and her agent at the outset. The court further noted that the Registrar of Deeds (third respondent) should not have been cited as a party since the transaction was a cession of municipal property rather than a matter requiring registration at the Deeds Office.

This case affirms important principles of agency law in Zimbabwean jurisprudence, particularly that a principal cannot avoid obligations to third parties based on an agent's fraud or dishonesty where the agent acted within the scope of actual or apparent authority. It protects third parties dealing with agents in good faith and reinforces the binding nature of agency relationships on principals, even where the agent may have acted improperly or outside the specific terms of the mandate.