Professional Documents
Culture Documents
Creation of Agency
Creation of Agency
Dr.D.Vetrivelan/AP/DoMS-PEC-VANIYAMBADI 22-09-2017
Conti
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Agent Servant
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CREATION OF AGENCY
Dr.D.Vetrivelan/AP/DoMS-PEC-VANIYAMBADI 22-09-2017
B-Agency by Holding out
Agency by holding out is a branch of the agency by estoppel.
Here an agency by holding out requires some affirmative or
positive act or conduct by the principal to establish agency
subsequently.
Thus, A, who is a domestic servant of B, generally purchase
goods on credit from C and pays them regularly. C can assume
that A is Bs implied agent. Subsequently A uses Bs authority to
purchase goods for his own use.
C files a suit against B to recover the cost of the goods which
were actually consumed by A. In this case, B is bound by his
prior conduct in holding out that A was his agent. C can
recover the price from B.
Dr.D.Vetrivelan/AP/DoMS-PEC-VANIYAMBADI 22-09-2017
C- AGENCY BY NECESSITY
An agency by necessity is conferred by law in certain
cases, where a person is faced with an emergency in which
the property or interests of another are imminent danger
and it becomes necessary in order to preserve the
property or interests, to act before the instructions of the
owner can be obtained.
Example- where a horse sent by rail was not taken
delivery of by the owner, the station master had to feed
the horse. It was held that the station master became an
agent of necessity and the owner liable for the charge
incurred by him.
Dr.D.Vetrivelan/AP/DoMS-PEC-VANIYAMBADI 22-09-2017
3. Agency by operation of law
Dr.D.Vetrivelan/AP/DoMS-PEC-VANIYAMBADI 22-09-2017
4. Agency by ratification
Ratification means giving a formal consent.
Ratification means subsequent acceptance by the principal in
respect of an act done by the agent without authority.
In other words, ratification means the subsequent adoption and
acceptance of an act originally done without authority or
instructions.
Ratification is an approval of a previous act or contract.
Example- A buys certain goods on behalf of B. B did not appoint
A as his agent.B may, upon hearing of the transaction, accept or
reject it. If B accepts it, the act is ratified.
https://www.youtube.com/watch?v=dn2vBtPsXTk
Dr.D.Vetrivelan/AP/DoMS-PEC-VANIYAMBADI 22-09-2017
Kinds of agent
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Universal agent-a universal agent is one who is
authorised to transact all the business of his principal
of every kind.
Del Credere agent- he is an agent who guarantees the
solvency of the buyer.
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Duties of an Agent towards the
principal
1. duty in conducting principals Business-
2. use of ordinary skill and diligence( careful in duties)
3.Duty to render accounts
4. To get directions of principal
5.Duty not to deal on his own account.- example A directs
to B to sell As estate. B buys the estate for himself in the
name of C. A on discovering that B has bought the estate
for himself, may repudiate the sale, if he can show that B has
dishonestly concealed any material fact, or that the sale has
been disadvantageous to him.
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6-duty not to make secret profit
7. duty to pay sums received for principal.
8. Not to delegate.
9. Duty to protect the interest of the principal when an
agency is terminated by the principal dying or becoming of
unsound mind, the agent is bound to take on behalf of the
representatives of his late principal.
10 Adverse title- the agent should not set up his own title of
third parties to the goods received by him from the principal
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Rights of an Agent
Right of retainer The agent has a right to retain, out of
any sums received all money due to him in respect of
remuneration, advance made, expenses incurred in
conducting business.
Right to receive remuneration if he has completed his
task. He is not entitled to any remuneration for part
transaction.
Right of lien he has right to exercise particular lien over
the goods, paper, property until the amount due to him
for commission, expenses has been paid.
Dr.D.Vetrivelan/AP/DoMS-PEC-VANIYAMBADI 22-09-2017
Right to be indemnified against consequence of lawful acts-
Right to be indemnified against consequences of acts done in good
faith- where one person employs another to do an act, and the
agent does the act, though it causes an injury to the right of third
person.
Right to compensation- the principal must make compensation to
his agent in respect of injury caused to such agent by the principals
neglect or want of skill.
Example- A employs B as a brick layer in building a house and puts
up the scaffolding himself. the scaffolding is unskillfully put and B in
consequence hurt. A must make compensation to B.
. means security or protection against a loss or other financial
Indemnity
Dr.D.Vetrivelan/AP/DoMS-PEC-VANIYAMBADI
burden 22-09-2017
To do lawful acts- according to sec 188 an agent
having authority to do an act has the authority to do
every lawful thing which is necessary in order to do
such act.
Right in Emergency- 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.
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Duties of principal
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3. Non- Liability of employer of agent to do a criminal
act- where one person employs another to do an act
which is criminal, the employer is not liable to the agent
either upon the express or an implied promise, to
indemnify him against the consequences of that act.
example- A employs B to beat C , and agrees to
indemnify him against all consequences of the acts. B
thereupon beats C and has to pay damages to C for so
doing. A is not liable to indemnify B for those damages.
Dr.D.Vetrivelan/AP/DoMS-PEC-VANIYAMBADI 22-09-2017
4. Duty to indemnify the loss for principals neglect-the
principal must make compensation to his agent in
respect of injury caused to such agent by the principals
neglect or want of skill.
example- scaffolding
5. Duties to pay remuneration and dues- it is the duty
of the principal to pay the agent all of his dues,
remuneration, commission etc..
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Rights of the principal
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Termination of Agency
Dr.D.Vetrivelan/AP/DoMS-PEC-VANIYAMBADI 22-09-2017
1 By the act of the parties
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3. Renunciation by the Agent-
( renunciation means the giving up of one rights, title)
When the agent re-announces the business of agency ,
it is terminated.
Reasonable notice must be given for such renunciation.
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2. By the operation of law.
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3. Death of either party-an agency is automatically
terminated on the death of the principal or the agent.
4. insanity of either party- an agency is terminated by
either principal or agent becoming of unsound mind.
(sec 201)
5. Insolvency of the principal- according to sec 201, the
agency is terminated by the principal being adjudicated
as an insolvent under the provisions of any act.
Dr.D.Vetrivelan/AP/DoMS-PEC-VANIYAMBADI 22-09-2017
6. Destruction of the subject matter: an agency which
is created to deal with certain subject matter will be
terminated by the destruction of the subject matter. For
example if an agent is asked to sell a car and the car is
destroyed by fire, then the agency comes to end.
7. Principal or agent becomes alien enemy.
8. Dissolution of a company.
9 Termination of sub-agents authority
Dr.D.Vetrivelan/AP/DoMS-PEC-VANIYAMBADI 22-09-2017