AGENCY

Define Agent & Principal. Discuss rules related to agency. What is the test for agency?

 Definition of Agent & Principal S.182

 AGENT

 PRINCIPAL

The Contract which creates the relationship of Principal and Agent is called an ‘Agency’

 RULES RELATED TO AGENCY

 Whatever a person may do by himself, may do through an agent

 Exception

 Acts requiring personal skills or qualification

 He who does through another does by himself S. 226

 TEST OF AGENCY

 Authority to act on behalf of other

 Binds the other to the third person

 Mere use of the word ‘AGENT’ does not create relationship of agency

 Agent & Servant & Independent contractor

 Servant

 Under direct control & supervision of his master

 Does not bind the master to third parties

 For some purpose he is authorized to bind, then to that extend he is an

agent

 Independent contractor

 He is employed to perform a particular work

 Manner and means of performance is left to his discretion

 He is free to do the work independently without employer’s control or

interference

 He does not bind the employer with the third parties

  Agent

 Not under direct control & supervision of principal

 Binds the principal to the third parties

 Who can appoint agent ?

 Principal must be a person competent to contract S.183

 Who may be an agent ?

 Any person may become agent S.184

 What is consideration in Agency ?

 Consideration is NOT necessary to create agency S.185

 Kinds of Agents

 On basis of authority

 Special agent

 General agent

 Universal agent

 On basis of work performed

 Mercantile agent

 Auctioneers

 Factors

 Brokers

 Del credere agent

 Non mercantile agent

 Attorneys

 Solicitors

 Insurance agents

 wife
Discuss the different modes for creation of agency.

 Modes of creation of Agency

 By principal’s authority S. 186

 Express

 Implied

 Express authority S.187

 By words

 Written

 Spoken

 Implied authority S.187

 Circumstances of the case

 Agency by implied authority can be in following forms:

 By estoppel S.237

 By holding out

 Prior positive or affirmative act on part of principal is required

 By necessity S.189

 By ratification

 Principal affirms or adopts unauthorised act of agent

 Retrospective effect

 Essentials of ratification

 Act done on behalf of the person who seeks to ratify S.196

 Keighley, Maxsted & Co. v. Durant (1901)

 Principal should be in existence and competent to contract

 Kelner v. Baxter (1866) – Pre-incorporation contracts cannot be

ratiifed

 Ratification may be express or implied S. 197

  Ratification with full knowledge S.198

 Ratification of whole transaction s.199

 Ratified act should not be injurious to a third person S.200

 Ratification within reasonable time

Discuss the different duties of an agent.

 Duty to follow principal’s direction S.211

 Duty to show proper skill & care S.212

 Duty to render proper accounts S. 213

 Duty to communicate S.214

 Duty not to deal on his own account S.215 & 216

 Duty to pay sums received for Principal S.218

 Duty not to delegate S. 190