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10.law of Agency
10.law of Agency
OF AGENCY
Definition of Agency
Section 182,
“ An agent is a person employed to do any act
for another or to represent another in dealing
with third persons.
The person for whom such act is done or who
is so represented, is called the principal”
• The person who delegates the authority
is known as principal.
• To whom the power is delegated is
known as agent.
• The relationship that is created is known
as agency.
• A person who act in place of another –
Agent
• The person on whose behalf he acts -
Principal
Essentials :Agency relationship
1. Agreement between principal and the agent,
may not a contract.
2. Intention of the agent to act on behalf of the
principal
FEATURES: Contract of Agency
• Principal is answerable to third parties for
the acts of agent .
• Consideration not necessary.
Ping !!!!
Q1 :Who can employ an agent ??
Q 2:Who may be an agent ??
Classification of Agents
(I) Basis : Extent of Authority
(I) Special Agents
One who is employed to do some
particular act or represent his principal in
some particular transaction. As soon as
the act is performed the authority of
agent comes to an end.
E.g. An agent engaged to sell a house.
(II) General Agent
One who is employed to do all such acts which are
connected with the business of trade of his
employer.
- continuous authority till it is ended.
E.g. manager
(v) Banker
The one who acts as a mercantile agent on behalf of his
customer when he collects cheques, drafts, bills & pay
insurance premium & buy or sell securities.
(vii) Del credere Agent
- The one who guarantees to his principal, the performance of
the financial obligation by party with whom he enters into a
contract on principal behalf, in consideration of an extra
commission.
- He becomes surety & become liable on the default of third
party.
1. Sub-agent
Sub-agent has a relation like of principal and agent.
Example: a banker authorised to let out a house and earn rent
may further give the work to an estate agent.
Example -
1. partners in a partnership firm
2. Promoters in case of company
Duties : Agent
1. To follow principal’s directions
E.g. An agent was instructed to insure goods. He failed to do
so. The goods were destroyed. He was held liable to the
extent of loss.
Example: time to time investment for interest