CONTRACT OF AGENCY

LBE

AGENT (Sec. 182)

A person employed to do any act for another or to represent another in dealings with a third person. Principal- the person for whom the act has been done by the agent.

Who Can Employ An Agent?

Person of the age of maturity and competent to contract. (Sec.183) Acting for the minor, the agent will be personally liable. Group of persons can employ an agent.

Who May Be An Agent?

It is immaterial whether or not the agent is legally competent to contract. (Minor)

CREATION OF AGENCY
By express agreement (sec.187) By ratification (sec.196-200) Consideration is not essential for creation of agency (sec.185)

 Agency by Estoppel (sec.237) when a person does not intervene when other person is showing to third party that he is his agent and In furure he enters into contract on his behalf Cohabitation -if the relationship is such that a person cannot denies .eg Husband and wife. Agency by Holding Out Agency of Necessity (sec.189) Agency by Ratification: Where a person accepts later on the act done without his permission

Requisites of valid Ratification

Agent must contract as agent. Principal must be competent. Must be made within a reasonable time. Act must be lawful. Principal should have full knowledge of facts and authority to ratify. Ratification cant be made to harm any right or interest of third party.

Classification Of Agents
General Agents Special Agents Mercantile Agents Non Mercantile Agents

General Agent
A General agent is one who is appointed to represent the principal in all the matters concerning a particular business

Special Agent
A Special agent is one who is appointed to do some particular act or enter into some particular contract

Mercantile Agents :one who has authority either to sell or buy or to raise money money on the security of goods.

Factor : He can sell goods I his own name Auctioneer : Del Credere Agent : charge extra commission for gurrantee. Pakka and Katcha adatias :

Indentor
Broker

Factor
Possession of property Sell on credit and in his own name General lien Cannot Barter Cannot Delegate

Auctioneer
Appointed to sell by auction Deliver goods on receipt of price Recover price from highest bidder Can file suit in his own name Particular Lien

Del Credere Agent

Agent as well as Guarantor

Pakka Adatias
Guarantees Principal and Broker Can himself perform

Katcha Adatias
Guarantees on the part of the Principal

Indentor
Procures a sale or purchase on behalf of the principal, with a merchant in the foreign country

Broker
Engage to buy or sell the property Memorandum book- Sold and Bought note

Commission Agent
Employed to buy or sell or to Transact Business
Not Liable for third party , Particular lien May or may not have possession

Non Mercantile Agent

Wife as an Agent
Living together and looking for necessaries

Husband is not Liable

Expressly forbidden credit Not necessary

Given money
Trader is told expressly

If they live apart:No fault of wife, liable to pay for her maintenance Or If they live apart:Under no justifiable Circumstances, she is not her Husbands agent

Sub agent and Substituted Agents

Sec 191:- Sub agent is employed by, and acting under the control of the original agent in the business of the agency Sec 194:- Where an agent, holding an expressed or implied authority to name another person has named another person, such person is agent of the principal for such part of the business of the agency as is entrusted to him.

Delegatus non potest delegare

Expressly permitted
Ordinary custom Nature of agency Nature of job assigned

DUTIES OF AN AGENT (Sec.209-220)

Conducting business acc. to Principals direction.

Conducting business with skill and diligence that is possessed by persons engaged in similar business.
Render proper accounts. Communicate to principal in case of difficulty.

Duties Contd.
Not to make secret profits.

Not to deal on his own account.

He is not entitled to remuneration for business misconduct. Not to disclose confidential information. Taking reasonable steps to protect and preserve the interests entrusted to him.

Rights of an Agent
Right to remuneration. (Sec 219-220) Right to retainer. (Sec 217) Right of Lien. (Sec 221) Right of stoppage in transit Right to compensation for the injury caused by principals neglect. (Sec 225)

Principals duties to Agent

Bound to indemnify the agent against the consequences of all lawful acts done by such agent in exercise of the authority conferred upon him. (Sec 222)

Liability to indemnify an agent against the consequences of an act done in good faith, though it causes an injury to the right of third person. (Sec 223)

CONTD.
Principal must make compensation to his agent in respect of injury caused to such agent by the principals neglect. (Sec 225)

Liability of principal to third person Principal is bound for all the acts done by the agent within the scope of his authority. When an agent exceed his authority: What he does can be separated. Sec 227 What he does cannot be separated. Sec 228 Misrepresentations by the agent. Sec 238 Liable even name is not disclosed. Bound to notice given to agent.

Personal liability of an agent

An agent can neither personally enforce contracts entered into by him on behalf of his principal, nor he is personally bound by them. But under these circumstances, he can: Where the contract is made by an agent for the sale or purchase of goods for a merchant resident abroad. Where an agent does not disclose the name of the principal.

CONTD.
Where the principal so disclosed can not be sued. Minor Breach of Warranty Where an agent expressly agrees to be personally bound Where an agent signs a negotiable instrument in his own name. An agent with special interest can be sued and can sue personally.

Agency Coupled with interest

Where agency is one coupled with interest. Agency is coupled with interest when authority is given for the purpose of securing some benefits to the agent. The agency cannot, unless there is an express contract, be terminated to the prejudice of such interest (Sec 202). It becomes irrevocable to the extent of such interest and does not terminate even by the insanity or death of the principal

Termination of Agency
An agency is terminated by the principals revoking his authority; or by the agent renouncing the business of the agency being completed; or by either the principal or agent dying or becoming of unsound mind; or by the principal being adjudicated an insolvent under the provisions of any act for the time in force for the relief of insolvent debtors.

CONTD.
By revocation by the principal (Sec 205) An Agency is irrevocable if: Authority is one coupled with interest. Authority has been partly exercised. (Sec 204)

On expiry of fixed period of time. On the performance of the specific purpose. Death of the principal or agent. (Sec 209) Insolvency of the principal By renunciation of agency by the agent. (Sec 205)

When termination takes effect

For agent For third party

Undisclosed Principal
Where an agent, though discloses the fact that he is an agent working for some principal, conceals the name of the principal.

Concealed Principal
Where an agent not only conceals the name of the principal but the very fact that there is a principal. Legal position in this regard is as follows: Other party has equal right against principal. Contracting party may refuse to fulfill the contract. Performance subject to the rights and obligation subsisting between the agent and the third party. Both agent and principal are equally liable.