Introduction

The, Section 182 of the Contract Act, 1872, defines “Agent is a person employed to do any act
for another in dealing with third parties”. An agent in commercial law (also referred to as a
manager) is a person who is authorized to act on behalf of another (called the principal or client)
to create a legal relationship with a third party. The principal has to perform his/her own part of
the agency in primarily two ways. The principal has to pay or where necessary indemnify the
agent for the services rendered or expenses incurred respectively.

The Contract Act of 1872, Sec.183 and 184 deals with the appointment of agent and who may be
called as agent. There may be different kinds of agent such as banker, factor, advocate etc.
According to the extent of authority there may be general, special, universal agent. There are
various rights which are given to agent and they can also be sued on certain grounds. There are
certain duties of agents such as execution of instructions, exercise of skill and care, act in good
faith etc. Likewise, principal also has certain duties such as payment of agent, indemnification of
agent. Various case laws have been dealt to explain these matters. Agents owes fiduciary duties
to the principal such as loyalty, confidentiality. A real estate broker who becomes an agent of a
seller or buyer is deemed to be a fiduciary.

Agent is authorized to create a contract between his principal and third party. An agent can-be
sued on his personal liabilities and the authority of an agent can be revoked.

Liabilities of An Agent

I. Duty to follow principals’ directions or customs: Section 211 declares that

the very first duty of an agent that he should act with the given direction of
principal. If agent disobey the given direction of principal then agent has to
pay for that. But if any error occurred even by following the directions of
 principal then agent is full free and principal cannot take any action against
agent.
II. As an example: B, a broker whose business is not the custom to sell on
credit, sells good of A on credit to C. Whose credit at the time was very high.
C insolvent before payment. B must make good the lost to A.
III. Duty to carry out the work with reasonable skill and diligence: Section 212
declares that he must conduct the business of agency with as much skill as is
generally possessed by persons engaged in similar business, unless the
principal has notice of want skill. If by the nature of profession, an agent is
purported to have special skill, he must exercise that degree of skill
ordinarily expected from the members of the profession.
IV. As an example: A, air agent for the sale of goods, having authority to sell
on credit. Sells to B without making the usual and proper enquire. B at the
time of sale is insolvent. A must compensate his principle in respect of any
loss sustained.

V. Duty to render accounts: the agent must keep accurate financial records, take
receipts, and otherwise act in conformity to standard business practices.

VI. Duty to communicate: from segment we discover that it is the obligation of

an operator to render legitimate records of his principals’ cash or anything
like property and submit them by following a method.

VII. Duty not to deal on his own account: from segment we discover that it is the
obligation of an operator to render legitimate records of his principals’ cash
or anything like property and submit them by following a method.
VIII. As an example: A direct B to sell an estate. Upon looking at the estate B
find out a mine on the estate. So, he wanted to buy the state from A, without
telling about the mine. A sell without any knowledge of the mine. So, upon
discovering A can adopt the sale at his option.

IX. Duty not to make any profit out of his agency except his remuneration: by
considering section 217 and 218 we can learn that an agent stands at a
fiduciary relation to his principal and therefore he must not make any secret
profit alongside or outside of his agency. He must deliver his all monies with
 legal evidence to his principal. If his acts are not Bonafede he will lose his
remuneration

X. Duty to termination of agency by principal’s death or insanity: Area 209

announces that when an office is ended by the chief passing on or flimsy the
operator must take follows up in the interest of his head.

XI. Duty not to delegate authority: An agent must not delegate his authority to
another person and perform the obligations himself.

XII. Duty of confidentiality: He should not disclose his confidential information.

XIII. Duty not to choose own interest: His interest must not be conflict able
towards his duty.

Rights of an Agent

I. Right to receive remuneration: According to section 219, an operator has an option to

get the concurred compensation or without understanding, a sensible compensation for
rendering the administrations to the primary that are not deliberate or unwarranted. He
gets qualified to get the compensation when he finishes the work that he embraced.

II. Right of lien: Section 211 an operator has likewise an option to hold the products or
property of a chief till the installment in due is gotten by him.

III. Right of retainer: Section (217) an agent has a right to retain all monies due to himself
in respect of his remuneration and other expenses properly incurred by him for the
business.

IV. Right of Compensation: Section 225 proclaims that in the event of injury caused to
operator by the carelessness of the chief might be repaid by the head.
As an example: A employee’s B as a brick-layer in building in a house and puts a
scaffolding himself unskillfully and B is in consequence, hurt. A must compensate B.
 V. Right to be indemnified against consequences of acts done in good faith: By
following area 223, when an operator demonstration in compliance with common
decency, the business must reimburse him for the results of that demonstration, however
it makes a physical issue the privileges of third individual.
As an example: B at Singapore at instruction from A of Dhaka, contract with C to deliver
goods. A does not send the good to B and C sues, B for breach of contract. B defends and
is compiled to pay damages. A is libel for B for such damages.

VI. Right to be indemnified by the principal for all lawful acts: Section 222 declares that
an agent has the right to be indemnified against consequences of all lawful acts done by
him in exercise of the authority conferred upon him.

VII. Right of stoppage of goods in transit: An agent has a right to stop the goods in transit to
the principal in some situations like if he has incurred personal expenses to acquire the
goods or the principal become insolvent.
As an example: A told B to sell some goods to C. But at the time of sell A become
insolvent and can’t pay the required expenses.so B can stoppage the transit the of goods
of A.

Termination of Contract

A contract is legally binding agreement. Contracts may be written or oral, but many important
contracts are often written and signed by both parties. Examples of contracts include sales
agreements, real estate purchase contracts, employment contracts, finder’s agreements, or
insurance contracts, to name a few. Once a party formally agrees to a contract, they become
liable under the eyes of the law and contract to fulfill their contractual duties. Failure to perform
the terms agreed to in a contract can result in a breach of contract lawsuit or various other legal
liabilities. Termination of contract is an act that may occur wherein a contract can be legally
terminated before the contractual duties have been fulfilled. Parties may choose to terminate
contracts for a variety of reasons, but not all terminations of contracts will allow them to escape
liability.

Conclusion
As can be seen, terminating a contract is a process which may either free you from your
obligations or subject you to numerous legal liabilities.  Therefore, it is important that you
review the contract thoroughly and make sure you fully understand your contractual duties
before signing the agreement.