AGENT, AGENCY AND AGREEMENT-THE

RELATION BETWEEN THREE

INTRODUCTION
Today business world has become one the
most important thing in our lives
Sometimes it is not possible to deal with
other people directly.

So what should we
do then?
Should we stop dealing
with those people and
loose business?
The answer to these questions is

We definitely cannot stop dealing with
people to whom we cannot interact
directly!
The solution to these sorts of problems is
the AGENCY AGREEMENT or in other
words the LAW OF AGENCY.

INTRODUCING THE MAIN TERMS

Agreement:

An agreement of agency is the legal contract
between the agent and the principal and it binds
these two parties legally and it also defines their
role and the duties they have to perform. It also
includes the restriction upon the agent and
sometimes the principal.
Agent:
An agent is a person or even any other
company employed to do any act for another
or to represent another in dealing with the
third party and the agent is also authorized to
represent or deal with the third party on the
behalf of someone.


Sub agent:
Sub Agent is a person employed and acting under the
control of the original agent. He is not responsible for
his acts to the principal. He is only responsible to the
agent.

Principal:
A principal is a person or a company which an agent
represents or in other words it is the one which is
represented to the third party by an agent.

Agency:
An agency is the relationship between the agent and
the principal and this relationship of agency is
governed by the agreement of agency.

THE LAW OF AGENCY

In this law, a principal which is mostly a
company gets in to contract with an agent which
is responsible to deal with the third party with
whom the principal cannot deal directly.

(FOR EXAMPLE)


Pepsi cannot provide their products to each and
every customer directly so what they do is that they
get into contract with the agents and then these
agents supply the products to different stores and
restaurants. Sometimes these agents hire sub agents
which help the agents to supply the products to a
particular customer.

THE RELATIONSHIP




The relationship between the principal,
agent and the third party is very important
each one of them is dependent on each
other.


The relationship of a Principal and Agent is that
the principal hires the agent and expects the agent
to be loyal and to fulfill its duties properly

Principal relies on the agent e.g. for the
effectiveness of the delivery of the products or
sale of a particular products

If an agent hires a subagent then the agent is
responsible for any act of the sub agent and the
agent is accountable to the principal for this

The third party buys a particular product
because of the agent and sometimes on the
guarantee of the agent

(FOR EXAMPLE)

Foreign company hires an agent in Pakistan
and he is supplying or selling the products of
the principal so in that case the agent can be
sued or held responsible for the
dissatisfaction or damage of the customers

Relationship of the Principal and The third
party, is somehow same as the agent and
the third party.

The principal is equally responsible of the
damage or harm to the third party as the
agent is

But the principal cannot hold accountable
only in one situation when the agent
expressly wish to be liable for the damage or
harm to the third party.

DUTIES OF AGENTS:
(RIGHTS OF PRINCIPAL)

Duty to follow
principals
directions or
customs.
Duty to render
accounts.

Duty not to deal
on his own
account.
Duty not makes
any profits out of
his agency except
his remuneration.
Duty on termination
of agency on the
death of the principal
or his insanity
An agent cannot
delegate the
authority further to
another person
THE RIGHTS OF AN AGENT:
(DUTIES OF THE PRIMCIPAL)

Right to receive
remuneration
Right to retain any
amount of sums
received on the
account of the
principal if not paid
commission yet
To retain the property
or documents of the
principal unless and
until the commission
due is received.

Right to be
indemnified against
the consequences of
all lawful acts done
by him in exercise of
the authority
conferred upon him.
An agent can be
indemnified by
principal for acts
done in good faith
CREATION OF AGENCY:
(GETTING INTO THE CONTRACT)


By express agreement

By implied agreement
Agency by ESTOPPLE.
Agency by Holding out.
Agency by necessity.

By ratification

TERMINATION OF THE AGENCY CONTRACT

By the act of the parties:
Agreement of the agency can be terminated at any time by
the mutual agreement between the principal and the agent.
Revocation by the principal
Renunciation by the agent

Termination by the operation of law:
Completion of the business of the agency
Expiry of time
Death of the principal or the agent
Insanity of the principal or the agent
Insolvency or bankruptcy of the principal
Destruction of the subject matter
Dissolution of the company
Principal and agent become alien enemies

SOCIAL AND BUSINESS IMPACT
Contract of agency has a lot of good points as far as the society
and the business world.

Helps protect the rights of both the principal and the agent.

Helped the growth of the business on the whole because due to
this law or agreement the companies can now reach to the
market and customers which previously they couldnt.

Helped a lot of people to save time be obtaining or hiring an
agent to do a particular task which was out of their reach and this
has provided the business world a huge opportunity to make it
BIG!!!

I AM NOW OPEN FOR QUESTIONS!!!