Special Contract Project

MATS LAW SCHOOL
MATS UNIVESITY
Project report submitted for partial fulfillment of BBA.LLB X Semester

for subject of Special Contract
On
Duties of Agent
Submitted by-
Submitted to- Dr. G.P Tripathi
Name Vishal Kohli

Student ID - MU11BLB040
Semester - IXth
ACKNOWLEDGEMENT
We have taken efforts in this banking law project. However, it would not have been
possible without the kind support and help of many individuals and my Professor Dr. G.P
Tripathi. I would like to extend my sincere thanks to all of them.

I am highly indebted to MATS Law School for their guidance and constant supervision as
well as for providing necessary information regarding the project & also for their support
in completing the project.
I would like to express my gratitude towards my parents for their kind co-operation and
encouragement which help me in completion of this project.
I would like to express my special gratitude and thanks to my professor for giving me
such attention and time.
My thanks and appreciations also go to my colleague in developing the project and
people who have willingly helped me out with their abilities.
Vishal Kohli
B.B.A.LL.B
9th Semester
CERTIFICATE
It gives me great pleasure to certify that the project entitled name of project In the partial
fulfillment of award of the degree B.B.A.LL.B is record of Vishal Kohli own work
under my supervision and guidance . The analysis made and conclusion arrived at are
based entirely on her own study of primary and secondary sources relevant to the topic
and have not been submitted elsewhere for the award any other degree.
Date:
SUPERVISOR: DR. G.P TRIPATHI
(ASSISTANT PROFESSOR OF LAW)
MATS Law School
DECLARATION
I, Vishal Kohli, B.B.A.LL.B 8th Semester of MATS Law School do hereby declare that,
this project is result of my own studies and observation and hence original in nature,
nothing in it is borrowed or copied without due acknowledgement. I express my gratitude
and indebted to one and all from whose works I have quoted references in my project.
Further I would appreciate cooperation and proper guidance of my faculty Prof. Dr. G.P
Tripathi that helped me carries out my work efficiently.
Vishal Kohli
B.B.A.LL.B
9th Semester
Index
Page no.
Introduction
Appointment of an Agent
Types of agency
Duties of an agent
11
Conclusion
22
Bibliography
23
Chapter- I
Introduction
The law of agency is an area of commercial law dealing with a set of contractual, quasicontractual and non-contractual fiduciary relationships that involve a person, called the
agent, that is authorized to act on behalf of another (called the principal) to create legal
relations with a third party.[1] Succinctly, it may be referred to as the equal relationship
between a principal and an agent whereby the principal, expressly or implicitly,
authorizes the agent to work under his or her control and on his or her behalf. The agent
is, thus, required to negotiate on behalf of the principal or bring him or her and third
parties into contractual relationship. This branch of law separates and regulates the
relationships between:
agents and principals (internal relationship), known as the principal-agent

relationship;
agents and the third parties with whom they deal on their principals' behalf (external
relationship); and
principals and the third parties when the agents deal.
In 1986, the European Communities enacted Directive 86/653/EEC on self-employed

commercial agents. In the UK, this was implemented into national law in the Commercial
Agents Regulations 1993
Any person, who is of the age of majority according to the law to which he is subject, and
who is of sound mind, can employ an Agent . As between Principal and third person a
person may become an Agent, so as to be responsible to his Principal according to the
provisions contained in the Act . No consideration is necessary to create an agency. The
authority of an Agent may be express or implied.
An authority is said to be express when it is given by words, spoken or written. An
authority is said to be implied when it is to be inferred from the circumstances of the case
and things spoken or written or in the ordinary course of dealing may account for the
circumstances of the case. An Agent having an authority to do an act has authority to do
every lawful thing, which is necessary in order to do such act. The Agent in doing that act
must neither do anything that is illegal, not beyond the limits of his own authority, nor
beyond the powers of his Principal. An Agent has authority in an emergency to do all
such acts for the purpose of protecting his Principal from loss as would be done by a
person of ordinary prudence, in his own case under similar circumstance . Several types
of commercial agents have been recognized under Indian law, which includes inter alia
brokers, auctioneers, del credere agents, persons entrusted with money for obtaining sales
and insurance agents.
Chapter- II
Appointment of an Agent
Apart from the principal who has the authority to appoint an agent, an agent may be
appointed under statutory powers by a person who represents an estate or by legal
guardians. Co-principals are also authorized to appoint an agent, and the agent can act in
matters in which the co-principals are jointly interested; however, if the co-principals
each own property, the agent is an agent of each co-principal separately in respect of each
ones property. Further, under the Act, two persons can also be appointed as agents and
unless the contract of agency requires them to act jointly, the act of either will bind the
principal.
Sub-Agents:
A sub-agent is a person employed by, and acting under the control of, the original agent
in the business of the agency. However, an agent cannot lawfully employ another to
perform acts which he has expressly or impliedly undertaken to perform personally,
unless by the ordinary custom of trade a sub-agent may, or, from the nature of the agency,
a sub-agent must, be employed.
The appointed sub-agent is bound by and responsible for his acts as if he were an agent
that was originally appointed by the principal; the agent is responsible to the principal for
the acts of the sub-agent and the sub-agent is responsible for his acts to the agent.
However, the sub-agent is not responsible towards the principal, except in cases of fraud
or willful wrong.
Where an agent, without having an authority to do so, appoints a person to act as a subagent stands towards such person in the relation of a principal to an agent, and is
responsible for his acts both to the principal and to third persons; the principal is not
represented by or responsible for the acts of the person so employed, nor is that person
responsible to the principal.
An agent is liable to the principal for any fraud or negligence of the sub-agent. However,
an agent can exclude his liability for the negligence of the sub-agent in the contract of
agency. There is no privity of contract between the principal and sub-agent; therefore a
principal cannot claim that a sub-agent to be accountable to him. However, a sub-agent is
accountable to the principal for a secret commission improperly received by him and is
also liable to him in tort.

As per the Act, contracts entered into through an agent, and obligations arising from the
acts performed by an agent, may be enforced in the same manner, and will have the same
legal ramifications, as if the contracts had been entered into, and the acts were personally
performed by the principal. The Act protects the principal from being liable where the
agent acts beyond his authority. In certain situations, where an agent does more than
what he is authorized to do, the part of what he does which is within his authority, can be
separated from the part which is beyond his authority and only the part done within his
authority is binding.
Chapter- III
Types of Agency
The most common types of agents are:
Sole selling agent;
Sub agent;
Mercantile agent;
Factor;
Forwarding or Clearing Agent;
Insurance Agent;
Director Agent;
Auctioneer;
Estate Agent;
Broker etc
Brief description:
Sole Selling Agent:

In case of sole selling agent, the relationship between the principal and the sole selling
agent is more or less of a seller and buyer and therefore, when a sole selling agent sells
the goods to his buyer the relationship between the sole selling agent and the buyer may
be of the vendor and purchaser unless the agency is disclosed.
Mercantile Agent
A mercantile agent is one having authority in the course of business to sell goods or
consign goods for the purpose of sale or to buy goods and even to raise money on the
security of goods. A mercantile agent is also called a commissioner agent.
Factor
A factor in ordinary course of business is entrusted with possession of the goods or with
possession of documents of title to goods;
Broker
He only brings about the transaction between the principal and the buyer or seller but the
possession of the goods or document of title to goods is not given to him. He is,
therefore, an agent, who in ordinary course of business is employed to make contract for
the purchase or sale of shares or goods.
Forwarding or Clearing Agent
A forwarding agent, also called shipping agent or clearing agent acts as agent of the
principal, who wants to export goods outside the country or to clear the goods imported
by the principal and all the functions for exporting or clearing and taking possession of
imported goods are done by this agent.
Estate Agent
An estate agent generally deals as intermediary in the transaction of sale and purchase of
immoveable property or in management of any property.
Auctioneer
An auctioneer is in law an agent of the person whose property is to e sold by auction
through him. He also becomes the agent of the auction purchaser when the bid is struck
down in his favor.
Agents under the Companies Act
There are three types of Agents under the Companies Act, 1956.
Sole Selling Agent;
Managing Director;
Manager;
The legislation puts certain restrictions on appointment:

In respect sole Selling agent:
The term of appointment of a Sole Selling agent cannot be for more than 5 years;
though renewable.
The appointment, as such, is subject to the approval of a general body of share

holders of the company prior to appointment or subject to ratification subsequent
to the appointment;
The terms and conditions of the appointment of a sole selling agent are subject to
approval by the Central Government, which has the power to vary the same in the
event they are found to be prejudicial to the interests of the Company;
The Company can appoint more than one such agents, however, the Government
has a right to declare any of them as the sole selling agent of that area;
A company cannot appoint as sole selling agent an individual, firm or body of

persons if it has any substantial interest in the company without the Government
approval;
A Company having a paid up capital of Rs. 50 Lakhs or more cannot appoint such
agent without Government consent;
Chapter IVDuties of an agent

An agent has a fiduciary duty to act loyally for the principals benefit in all matters
connected with the agency relationship. This duty supplements the duties created by an
agency contract. A fiduciary duty exists because agency is a relationship of trust and
confidence. The principals many remedies for an agents breach of her fiduciary duty
include termination of the agency and recovery of damages from the agent.
Duties to execute mandate:
The first and the foremost duty of every agent is to carry out the mandate of this
principal. He should perform the work which he has been appointed to do. Any failure in
this respect would make the agent absolutely liable for the principals loss. Thus it had
been held in number of cases that:
The rule of equity is, that if an order is sent by a principal to a factor to make an
insurance, and he charges his principal, as if it was made ,if he never in fact made that
insurance, he is considered as the insurer himself.
In such cases the agent is held liable to the principal for the amount which would have
been recovered if the goods had been insured. Thus, for example, in Pannalal Jankidas v.
Mohanlal:
A commission agent purchased goods for his principal and stored them in a go down
pending their dispatch. The agent was under instruction to insure them. He actually
charged the premium for insurance , but failed to insure the goods. The goods were lost in
an explosion in the Bombay harbor. The agent was held liable to compensate the principal
for his loss in us the amount received under the Bombay Explosion Ordinance, 1944,
under which the Government paid compensation up to fifty per cent in respect of the
uninsured merchandise lost in the explosion
Duties to follow Instructions or Customs:

When an agent is appointed to facilitate or negotiate a transaction on behalf of the
principal, the agent owes a duty to the principal to act in the principals best interests
within the authority of the agent.
In practice, the duty to act in the best interests of the principal requires the agent to use
his due diligence and skill to negotiate terms of a transaction on behalf of his principal
with a third party to the greatest advantage of his principal in the circumstances.
According to Section 211 an agent that an agent is bound to conduct the business of his
principal according to the directions given by the principal and to keep himself within the
confines of his authority. In the absence of directions, the agent has to follow the custom
which prevails in businesses of the same kind and at the place where the agent conducts
such businesses. When the agent acts otherwise, if any loss be sustained, he must make it
good to his principal, and, if any profit accrues, he must account for it. Thus for example,
in Liley v.Doubleday:
An agent was instructed to warehouse his principals goods at a particular place. He
placed a part of them at a different warehouse which was equally safe. But the goods
were destroyed without negligence. The agent was held liable for the loss. Any
disobedience, or departure from, the instructions make the agent absolutely liable for the
loss.
Where a principal had given instructions of ambiguous nature which were capable of two
meaning, he was not permitted to argue as against the agent that he should have read the
instruction in the other sense than what he actually did.
In the absence of instructions, business customs must be followed. Where, for example,
the customs of a trade require that goods should not be sold on credit or in return for a
negotiable instrument; the agent should not do so. If he does so, he would be liable to the
principal for any loss resulting from the transaction.
Because an agent acts under the principals control and for the principals benefit, she
has a duty to act within her actual authority and to obey the principals reasonable
instructions for carrying out the agency business.
There are exceptions to the duty to obey instructions. A gratuitous agent need not obey
his principals order to continue to act as an agent. Also, agents generally have no duty to
obey orders to behave illegally or unethically. Thus, a sales agent need not follow
directions to misrepresent the quality of the principals goods, and professionals such as
attorneys and accountants are not obligated to obey directions that conflict with the
ethical rules of their professions.
Usually a principals instructions are clear and can be easily followed. Sometimes,
however, the instructions are ambiguous. For example, an instruction may have terms an
agent does not understand. Or perhaps a cell phone conversation may be garbled due to
poor signal strength. When a principals instructions are unclear, the agent has a duty to
communicate with the principal to clarify the instructions.
Duty of reasonable care and skill
Section 212 lays down the standard of care and skill required by an agent.
a. Common law requires an agent to act with due care and skill in performing his duties.
Agents who fail to meet this standard are prima facie negligent.
b. Generally speaking, an agent in a certain profession, trade or calling who performs his
duty with the degree of care and skill expected of a reasonable, average member of the
relevant profession, trade or calling meets the requisite standard.
The Agent is bound to act with reasonable diligence, and to use such skill as he
possesses; and to make compensation to his principal in respect of the direct
consequences of his neglect, want of skill or misconduct, but not in respect of loss or
damage which are indirectly or remotely caused by such neglect, want of skill, or
misconduct.
If the principal suffers any loss owing to the agents want of care or skill, the agent must
compensate the principal for such loss .An agent is liable to his principal for the direct
consequences. If, for example, an agent fails to send the principals money in time, he
may be liable for the money and the loss of interest, but not if the principal becomes
insolvent by that reason .Keppel v.Wheeler An agent was appointed to sell a house. He
received as offer which he promptly communicated to his principal. The latter accepted it
provisionally subject to contract. Subsequently the agent received a higher offer which
he failed to pass on to the principal. This resulted in final acceptance of the first offer in
ignorance of the second. The agent was held liable to make good the principals loss in
terms of the difference in the two prices.
The meaning direct consequences has been explained by Pannalal Jankidas

V.Mohanlal
An agent, having been instructed to insure certain goods, failed to do so. The goods were
lost in an explosion at the docks. Even if the agent had taken out a fire insurance policy in
the usual form it would not have covered a loss of this kind, as fire due to explosion
would have been an expected peril. But the Bombay Government pass an ordinance
under which it overtook to pay half loss in cases of uninsured goods. Thus the principal
got only half of what he would have got if the goods had been insured.
The agent contended that as the passing of the ordinance could not have been
anticipated,the loss was too remote. But, it was held by a majority, that the loss was the
direct result of the agents negligence.
A paid agent must act with the care, competence, and diligence normally exercised by
agents in similar circumstances. Paid agents who represent that they possess a higher than
customary level of skill may be held to a correspondingly higher standard of
performance. Similarly, an agents duty may change if the principal and the agent agree
that the agent must possess and exercise greater or lesser than customary care and skill.
Agent is also under the duty to communicate with the principal- It is the duty of an agent,
in cases of difficulty, to use all reasonable diligence of communicating with his principal,
and in seeking to obtain his instructions. Unless otherwise agreed, an agent may not use
or communicate confidential information of the principal for the agents own purpose or
that of a third party. Confidential information is the principals information entrusted by
the principal to the agent for purposes of the agent carrying out her duties. Confidential
information includes facts that are valuable to the principal because they are not widely
known or that would harm the principals business if they became widely known.
Examples include the principals business plans, financial condition, contract bids,
technological discoveries, manufacturing methods, customer files, and other trade secrets.
In the absence of an agreement to the contrary, after the agency ends almost all fiduciary
duties terminate. For example, an agent may compete with her principal after termination
of the agency. As the following ABKCO case illustrates, however, the duty not to use or
disclose confidential information continues after the agency ends. The former agent may,
however, utilize general knowledge and skills acquired during the agency.
DUTY TO AVOID CONFLICT OF INTEREST
An agent whose interests conflict with the principals interests may be unable to
represent his principal effectively. Therefore, an agent may not acquire a material benefit
from a third party in connection with an agency transaction. When conducting the
principals business, an agent may not deal with himself. For example, an agent
authorized to sell property cannot sell that property to himself. Many courts extend the
rule to include transactions with the agents relatives or business associates or with
business organizations in which the agent has an interest. However, an agent may engage
in self-dealing transactions if the principal consents. For this consent to be effective, the
agent must disclose all relevant facts to the principal before dealing with the principal on
his own behalf.
Unless the principal agrees otherwise, an agent also may not compete with the principal
regarding the agency business and not assist the principals competitors, so long as he
remains an agent. Thus, an agent employed to purchase specific property may not buy it
himself if the principal desires it. Furthermore, an agent ordinarily may not solicit
customers for a planned competing business while still employed by the principal.
Finally, an agent who is authorized to make a certain transaction may not act on behalf of
the other party to the transaction unless the principal knowingly consents. Thus, one
ordinarily may not act as agent for both parties to a transaction without first disclosing
the double role to, and obtaining the consent of, both principals. Here, the agent must
disclose to each principal all the factors reasonably affecting that principals decision.
Occasionally, though, an agent who acts merely as a middleman may serve both parties to
a transaction without notifying either. For instance, an agent may simultaneously be
employed as a finder by a firm seeking suitable businesses to acquire and a firm
looking for prospective buyers, so long as neither principal expects the agent to advise it
or negotiate for it.
An agent will not breach her duty of loyalty, however, if she acts in good faith, discloses
to the principal all material facts regarding her conflict of interest, and deals fairly with
the principal.
.
An agent who has accepted an appointment to act for a principal (A) should not
thereafter accept appointment to act for another principal (B) if the interests of
principal B conflict with the interests of principal A. However, if the agent fully discloses
to each principal the agents interests under the two appointments and the fact that he acts
for both principals at the same time and obtains the consent of each principal to the dual
agency, he may still act for the two principals. Accordingly, an estate agent who acts for
both the vendor and purchaser in a sale and purchase property transaction must disclose
the fact to both the vendor and the purchaser and obtain their consent for so acting.
The agents duty to avoid conflict of interest applies equally to cases where the
interest of the agent himself or that of his close relatives conflicts or potentially
conflicts with his duties to the principal. However, if the agent fully discloses
such interests to the principal and obtains the principals consent, the agent may
still act for the principal. Failure to make full disclosure to the principal is a
breach of the agents fiduciary duty and the agent is liable to account for any
profit that the agent has made from such transaction in addition to other remedies
available to the principal for the agents breach of duty. The following situations
require more discussion:
Purchase or rent from principal the general rule is that an agent cannot purchase or rent
property from his principal without full disclosure of all the facts to the principal. The
agent has to show:
How the terms and conditions of the sale or tenancy to the agent compare to a sale
or tenancy to a third party in the market;
He has disclosed all the relevant facts to the principal before entering into any
agreement with the principal; and
The principal has given his informed consent to such a transaction.
ii.Sale or rent to principal similarly, an agent may not sell or let his own property to his
principal without full and frank disclosure and the obtaining of his principals informed
consent. The agent has also to show how the terms of the relevant transaction compare to
similar transactions in the market.
Duty not to make secret profit
Common law requires that an agent should not make any profit or acquire any benefit in
the course and in the matter of his agency without the knowledge and consent of his
principal. Such profit, generally known as secret profit, is not restricted to money but
may include anything of value, for example, an interest-free loan, a club membership, etc.
An agent who has made secret profit is liable to account to the principal for such profit in
addition to any other remedies available to the principal for the agents breach of duty.
The following situations are some examples of secret profit:

Use of property
An agent who uses property entrusted to him by the principal to make a profit for himself
and without the principals consent is in breach of his duty not to make secret profit. For
example, if an estate agent is entrusted with the keys to a property by its owner for the
purpose of listing while the owner is abroad, and the estate agent lets the property to a
third party and receives and keeps the rent for himself without the consent of the owner,
the estate agent will be, among other things, in breach of his duty not to make secret
profit.
Use of position
In some circumstances, an agent may obtain a benefit simply through his position as
agent of the principal. For example, an agent appointed to purchase goods for his
principal from a supplier obtains secret monetary benefit from the supplier for placing
purchase orders with the supplier. Such an act by the agent will amount to making secret
profit. Likewise, if a company director is entrusted with the task of negotiating a contract
with a third party on behalf of the company (that is, as the companys agent), the director
cannot subsequently enter into that contract personally with that third party, even if the
latter is willing to do so without the companys consent. An agent who, without lawful
authority or reasonable excuse, solicits or accepts any advantage in relation to his
principals affairs or business in the course of his agency shall be guilty of an offence
under Section 9 of the Prevention of Bribery Ordinance, Cap. 201.
Use of information or knowledge
An agent who acquires information or knowledge which he has been employed by the
principal to collect or discover, or which he has otherwise acquired for the use of his
principal should not make use of the same for his personal gain. For example, in the
course of acting for a purchaser, an estate agent looks for a property for investment in a
particular building specified by the principal and becomes aware of a property in that
building which is being offered for sale at below the market price. If the estate agent
makes use of this information, which he is appointed to obtain on behalf of the purchaser,
and acquires that property himself without disclosing the same to the purchaser and
makes a profit by reselling it, the estate agent will, among other things, be in breach of
his fiduciary duty not to make secret profit.
However, the duty not to make secret profit may be discharged if the agent makes full
disclosure of all the relevant facts to the principal and the principal consents to the
making and retention of such profit by the agent.
Can agents duty to account to his principal secret profits he has made in the course of the
agency continue even after the agency relationship terminates.
Duty to remit sums
According to Section 218 of Indian Contract Act, agent is under the duty to remit sum
repay to his principal all sums received on his account. The agent is, however, entitled to
deduce his lawful charges, but subject only to this right, the principals money must be
remmited to him even if it has been received in pursuance to a void or illegal contract.
The agent has to perform this duty even if his earnings for the principal flow out of void
or illegal transactions. If an agent receives money on his principals behalf under an
illegal and void contract, the agent must account to the principal for the money so
received and cannot set up the illegality of contracts as a justification for withholding
payment, which illegality the other contracting party has waived by the paying the
amount.
The agent has the right to make a counter claim. The Bombay High Court did not
consider it fair or in the interest of justice to compel the agent to deposit the amount in
the court as a measure of protecting his principal, particularly where there was a claim
against the claim.
Duty to maintain Accounts:
Alan agent who receives any property for his principal or from his principal is bound to
keep such property separate from his own and he is to be treated as a trustee of such
property.
For the reason stated in sub-paragraph (a), an agent has a duty to keep proper
accounts of the property received by him in the course of the agency and to render
such account to the principal on request.
Even after the agency relationship has ceased, the agents duty to account to the principal
may continue. Hence, the agent is obliged to return to his principal all documents and
property originally given to the agent by the principal and documents prepared by the
agent on the instruction and at the expense of the principal.
Agents must keep accurate records and accounts of all transactions and disclose
these to the principal once the principal makes a reasonable demand for them. Also, an
agent who obtains or holds property for the principal usually may not commingle that
property with her own property. For example, an agent ordinarily cannot deposit the
principals funds in her own name or in her own bank account.
In Ram All v.Asian Commrel[xii]The High Court observed:
The right to claim a statement of accounts is an unusual form of relief,only granted in
certain specific cases and is only to be claimed when the relationship between the parties
is such that this is the only relief which will enable the claimant to satisfactorily assert his
legal rights.
Duty not to delegate
The general rule is that an agent may not delegate his authority or duty in whole or in part
except with the authority and consent of the principal.
Owing to the fact that an agency agreement is privy to the principal and the agent and
that authority is normally given to the agent personally, on account of his trustworthiness,
skill or experience, the agent is under a duty to the principal not to delegate his duties
under the agency agreement to another person, but to exercise the authority in person.
Hence, an agent has normally no implied authority to employ deputies or sub-agents to
carry out his duties.
Where an agent is not authorised to delegate, the act of a sub-agent appointed by the
agent will not be binding on the principal. The agent who so delegates his authority is
also in breach of the duty not to delegate and is liable to compensate for any loss which
the principal may suffer in consequence of the agents failure to exercise his authority in
person.
It was laid down in John McCain and Co. v. Powthat unless so authorized by the
principal, an estate agent has no right to appoint a sub-agent and delegate to him his
powers which require special skill and care. No implied authority could be pleaded. In
this case the sub-agent affected a sale on his account. The agent had sued for his
commission. The court negatived the claim as the contract of agency did not permit
appointment of sub-agent.
But there are exceptions in the following cases when the agent can delegate:
Nature of work: Sometimes the very nature of work makes it necessary for the
agent to appoint a sub- agent .For example, an agent appointed to sell an estate
may retain the services of an auctioneer and the one authorized to file a suit may
engage a lawyer. A banker instructed to make payment toa particular person at the
particular place may appoint a banker who has an office at that place. A banker
authorized to let out a house and collect rents may entrust the work to an estate
agent.
2.Trade Custom-A sub-agent may be appointed and the work delegated to him if there is
ordinary custom of trade to that effect. Thus architect generally appoints surveyors.
1. Ministerial action-An Agent cannot delegate acts which he has expressly or impliedly
undertaken to perform personally, eg. acts requiring personal or professional skill. But the
agent may delegate acts which are purely ministerial in nature, e.g., authority to sign.
4.Principal Consent
The principal may expressly allow his agent to appoint a sub-agent.His consent may also
be implied from the conduct of the parties. The principal may ratify his agents
unauthorized delegation.
Chapter V
Conclusion
An agency is the creation of a contract entered into by mutual consent between a
principal and an agent. By agency, a principal grants authority to an agent to act on behalf
of and under the control of the principal. The relation between a principal and an agent is
fiduciary and an agents actions bind the principal. An agent is liable to a principal when
he/she acts without actual authority, but with apparent authority. An agent is liable to
indemnify a principal for loss or damage resulting from his/her act. A principal owes
certain contractual duties to his/her agent. Correlative with the duties of an agent to serve
a principal loyally and obediently, a principals primary duties to his/her agent include:
To compensate the agent as agreed; and To indemnify and protect the agent against
claims, liabilities, and expenses incurred in discharging the duties assigned by the
principal.
Chapter VI
Bibliography
Books referred Avtar Singh, Contract & Specific Relief Act 724-727(10th ed.2008)
Pollock & Mulla ,Indian contract and Specific relief acts 780-785(8th ed.,2008)
R. K. Bangia, Indian Contract Act 278-280(11th ed., 2004)
R.L.Meena ,Law of Contract 401 (8th ed. 2008)
John Cartwright, Ansons Law of Contract 567 (29th ed.,2010)
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HYPERLINK "http://www.letlink.co.uk/index.php?
option=com_content&view=article&id=271%3Athe-law-of-agency-legal-dutiesof-an-agent&catid=71%3Aagency&Itemid=100046"Itemid=100046"
option=com_content&view=article&id=271%3Athe-law-of-agency-legal-dutiesof-an-agent&catid=71%3Aagency&Itemid=100046"view=article HYPERLINK
option=com_content&view=article&id=271%3Athe-law-of-agency-legal-dutiesof-an-agent&catid=71%3Aagency&Itemid=100046" HYPERLINK
option=com_content&view=article&id=271%3Athe-law-of-agency-legal-duties-
of-an-agent&catid=71%3Aagency&Itemid=100046" HYPERLINK
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of-an-agent&catid=71%3Aagency&Itemid=100046"view=article HYPERLINK
option=com_content&view=article&id=271%3Athe-law-of-agency-legal-dutiesof-an-agent&catid=71%3Aagency&Itemid=100046"Itemid=100046
http://catalog.flatworldknowledge.com/bookhub/reader/6433?e=mayer_1.0ch38_s02
http://www.netlawman.co.in/ia/agency-finer-details-in-the-indian-context
http://www.icaiknowledgegateway.org/littledms/folder1/agency.pdf
http://www.vakilno1.com/bareacts/indiancontractact/indiancontractact.html
http://www.e-iure.com/pdf/agency/2007/india.pdf

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MATS LAW SCHOOL

Project report submitted for partial fulfillment of BBA.LLB X Semester

Submitted to- Dr. G.P Tripathi

Name Vishal Kohli

Tripathi. I would like to extend my sincere thanks to all of them.

agents and principals (internal relationship), known as the principal-agent

principals and the third parties when the agents deal.

In 1986, the European Communities enacted Directive 86/653/EEC on self-employed

also liable to him in tort.

Sole selling agent;

Forwarding or Clearing Agent;

Sole Selling Agent:

Sole Selling Agent;

The legislation puts certain restrictions on appointment:

The appointment, as such, is subject to the approval of a general body of share

A company cannot appoint as sole selling agent an individual, firm or body of

Chapter IVDuties of an agent

Duties to follow Instructions or Customs:

The meaning direct consequences has been explained by Pannalal Jankidas

The principal has given his informed consent to such a transaction.

The following situations are some examples of secret profit:

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