Okwejiminor v Gbakeji (2008) 5 NWLR (Pt.1079) 172 Mohammed JSC defined the concept of agency thus:- “Agency is the relationship which exists or arises where one person called the agent, has the authority or capacity to create legal relations by acting on behalf of another person called the principal, whereby the latter undertakes to be answerable for the lawful acts of the former provided it was done within the scope of the former’s authority, or ratified by the latter”.
ACT OF FRAUD BINDS PRINCIPAL WHEN AGENT ACTS WITHIN SCOPE OF AUTHORITY
A principal, whether disclosed or otherwise is in position to plead all defences available to him, but in the case of fraud, where the Agent acts within the scope of his authority, actual or apparent, the act of fraud on the part of the agent binds the principal. The same goes for an act of undue influence, vis-a-vis the third party, brought to bear on the principal by the agent. The problem is one to be sorted out between the Principal and the Agent and not the third party.
— Eso, JSC. Ashibuogwu v AG Bendel State (1988) – SC.25/1986