The general law behind agency practice: where Hong Kong law comes from, how an agency is created and ended and what an agent owes the principal, how contracts (including land contracts) are formed, broken and remedied, and liability for misrepresentation and negligent advice. Syllabus 3.1 to 3.6 is Level 1 (awareness), so questions test definitions and short fact patterns rather than case law.
Part I · Stand-alone questions·8 min read·9 sections
✓Checked against the Basic Law, Articles 8, 82 and 84; High Court Ordinance (Cap. 4), s.16(1); Conveyancing and Property Ordinance (Cap. 219), s.3; Misrepresentation Ordinance (Cap. 284), ss.2–4; Control of Exemption Clauses Ordinance (Cap. 71), ss.3 and 7; Prevention of Bribery Ordinance (Cap. 201), s.9; Estate Agents Ordinance (Cap. 511), s.36; EAA, A Study Guide to Estate Agency Law and Practice, Part 3; EAA SQE Syllabus 3.1–3.6; checked 11 Oct 2026.
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Must-know for the exam
✓Basic Law Art. 8 keeps the common law, rules of equity, ordinances, subordinate legislation and customary law. Where law and equity conflict, equity prevails (Cap. 4, s.16(1)).
✓Agency is created four ways: express, implied, by estoppel (the principal's own representation of authority) and by ratification, which relates back to the original act.
✓An agent's eight duties: obey lawful instructions, due care, disclose material information, avoid conflicts, confidentiality, no delegation, no secret profit, no misrepresentation.
✓Agency ends by the parties (agreement, revocation, renunciation) or by law (death or incapacity, supervening illegality, destruction, enemy status), and on expiry or full performance.
✓An advertised price is an invitation to treat, not an offer. A counter-offer destroys the original offer. Silence is not acceptance. A posted acceptance takes effect when posted.
✓Consideration need not be adequate but cannot be past; part payment of a debt does not discharge the balance unless by deed or for fresh consideration.
✓No action on a land contract unless it, or a note of it, is in writing and signed by the party to be charged or his authorised agent (Cap. 219, s.3).
✓A 10% deposit is the customary forfeitable amount; a larger deposit is likely a penalty, unless special circumstances justify it.
✓Cap. 284, s.3(1): damages for misrepresentation unless the maker proves reasonable belief; s.3(2): damages in lieu of rescission. Exclusion clauses must pass Cap. 71's reasonableness test.
✓Negligent misstatement: special skill, the adviser knows the claimant will rely, reliance is reasonable, and loss follows. No contract is needed.
▸On this page · 9 sections
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Traps that cost marks
→Forgetting that equity and customary law are listed in Article 8 as well as the common law and ordinances.
→Thinking a more recent judgment wins regardless of which court gave it.
→Thinking equity also overrides an ordinance, when it prevails only over the common law.
→Assuming a later or more detailed regulation can override the ordinance that authorises it.
→Thinking a signed letter is enough to let someone else sign a deed such as an assignment.
→Assuming that a buyer meeting the asking price lets the agent bind the vendor.
→Thinking secret internal limits on an agent's authority protect the principal against a third party who relied on the principal's words.
→Dating the contract from the day of ratification instead of from the agent's original act.
Why this matters in the exam
Part 3 is Level 1, but it is easy to examine: a short fact pattern, then 'is there a contract?', 'which duty was breached?' or 'how did the agency end?'. You do not need case names. You need exact definitions, because the wrong options are near misses.
It also explains an agent's risk outside the Estate Agents Ordinance (Cap. 511): one careless statement about saleable area can be a misrepresentation, negligence and a Code of Ethics breach at once.
Where Hong Kong law comes from
•Common law: judge-made law. Under judicial precedent a court follows the ratio decidendi (legal reason for the decision) of higher courts: Court of Final Appeal, Court of Appeal, Court of First Instance, District Court, Magistrates' Courts. Other common law decisions are persuasive only (Basic Law, Arts. 82 and 84).
•Equity: rules that soften the common law, with discretionary remedies such as specific performance and rectification. If equity and common law conflict on the same matter, equity prevails (High Court Ordinance (Cap. 4), s.16(1)).
•Statute: ordinances and the subordinate legislation made under them. Statute overrides common law and equity.
•Basic Law, Art. 8: the pre-1997 laws continue unless they contravene the Basic Law.
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