Introduction

To meet the rising demand, manufacturers and shopkeepers began to hire others to work for them. These helpers or servants as they were called performed whatever physical tasks were assigned to them, under the close personal supervision of the master. Secs.182 to 238 of Indian Contract act, 1872 deal with the subject of agency.

Agent and Agency

Agent a person employed to do any act for another or to represent another in dealings with third person. The person for whom or on whose behalf he acts is called the Principal. The Relationship between the agent and principal is called agency. This relationship is based upon an agreement whereby one person acts for another in transaction with a third person. Sec.183- Any person who is of the age of majority according to the law to which he is subject and who is of sound mind, may employ agent. Sec-184- No person who is not of the age of majority and of sound mind can become agent, as to be responsible to his principal.

Kinds of Agencies

Express agency (Sec.187) Implied agency (Sec.187) Agency by estoppel (Sec.237) Agency by holding out Agency of necessity (Sec.189) Agency by ratification (Secs.196200) Agency coupled with interest

Classification of Agents

Special and general agents Mercantile or commercial agents Non-mercantile or non-commercial agents Sub-agent and substituted agent (Secs.190-195)

Duties and Rights of Agent

Duties of agent

To conduct the business of agency according to the principals directions (Sec.211). The agent should conduct the business with the skill and diligence To render proper accounts (Sec.213) To communicate with the principal in case of difficulty (Sec.214) Not to make any secret profits Not to deal on his own account Not entitled to remuneration for misconduct (Sec.220). Not to disclose confidential information supplied To take all reasonable steps for the protection and preservation of the interests entrusted to him

Rights of agent
Right to remuneration (Secs.219-220). Example: Pawar appoints Amar, a broker. Amar is entitled to his commission when he has procured a party who is willing to negotiate on reasonable terms and to desirous of entering into a contract with Pawar.

Right of retainer (Sec.217).

Agent may retain, out of any sums received on account of the principal in the business of the agency, all moneys due to himself in respect of advances made or expenses properly incurred by him in conducting such business and also such remuneration as may be payable to him for acting as agent. This is known as agents right of retainer.

Right of lien (Sec.221).

In the absence of any contract to the contrary, agent is entitled to retain goods, papers and other property, whether movable or immovable of the principal received by him, until the amount due to himself for commission, disbursements and services in respect of the same has been paid or accounted for to him.

Right of stoppage in transit.

The agent can stop the goods while in transit in two cases:

(a) Where he has purchased goods on behalf of the principal either with his own funds, or by incurring a personal liability for the price, he stands towards the principal in the position of an unpaid seller. (b) Where agent holds himself liable to his principal for the price of the goods sold.

Right of indemnification (Secs.222224).

The principal is bound to indemnify agent against the consequences of all lawful acts done by the agent in exercise of authority conferred on him.

Duties of a Principal
He is 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) He is liable to indemnify agent against the consequences of an act done in good faith, though it causes an injury to the rights of third persons (Sec.223) He is bound to compensate his agent in respect of injury caused to such agent by the principals neglect or want of skill (Sec.225).

Liability of principal to third parties

For all his acts done within the scope of his authority (Sec.226). For the acts of the agent falling not only within the actual authority but also within the scope of his apparent or ostensible authority. Where agent exceeds his authority (Sec.227) For misrepresentations made or frauds committed by agent (Sec.238). To the third parties even where his name was not disclosed. Bound by any notice or information given to the agent in the course of business transacted by him. In cases where agent is held personally liable. Sec.223.

Undisclosed principal

Where agent, though discloses the fact that he is agent working for some principal, conceals the name of the principal, such a principal is called an undisclosed principal.

Concealed principal

Where agent conceals not only the name of the principal but the very fact that there is a principal, the principal is called a concealed principal.

Personal Liability of Agent

Sec.230- Being only a medium, the agent can, in the absence of a contract to the contrary, neither personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them. Personal Liability of AgentIf there is an agreement to the effect exist: i. where the contract is made by agent for the sale or purchase of goods for a merchant resident

abroad;
ii. where the agent does not disclose the name of his principal; iii. where the principal, though disclosed, cannot be

Termination of Agency (Sec.201)

On revocation by the principal

On the expiry of fixed period of time

On the performance of the specific purpose Insanity or death of the principal or agent

In case the subject matter is either destroyed or

rendered unlawful.

Insolvency of the principal

By renunciation of agency by the agent

When termination of agency takes effect?

The termination of the authority of agent does not, so

far as regard the agent, takes effect before it becomes

known to him (Sec.208). As regards third parties, they can continue to deal with the agent till they come to know of the

termination of the authority (Sec.208). The termination of the authority of agent causes the termination of authority of all sub-agents appointed by him.

Power of Attorney
Sec.2(21) of the Stamp Act Any instrument not chargeable with a fee under the law relating to court fees for the time being in force, which empowers a specified person to act for and in the name of the person executing it. Powers of Attorney Act, 1882, but does not define it. A power of attorney may be special or general

Sec.32 (c) of the Registration Act, 1908Where a document is presented for registration by the agent of a person entitled to present it for registration, such agent must be duly authorized by power of attorney executed and

authenticated in manner as mentioned in Sec.33 of the Act.

The power of attorney is required to be engrossed on nonjudicial stamp paper. Sec.4 of the Power of Attorney Act, 1882The original deed of power can be deposited in the High Court in

whose jurisdiction the principal resides and a certified copy of