Agency

A person who has capacity to contract may

enter into a contract with another

1) Either by himself
2)Through another person
• An “Agent” is a person employed to do any
act for another or represent another in is
dealings with third person
• The function of an agent is to bring his
principal into connectional relations with
third parties. The agent is merely a
connecting link between the principal and
third parties .
 Essentials relationship of Agency
1) Agreement between the principal and the
agent
2) Intention of agent to act on behalf of the
principal
 Kinds of Agents
A) 1)Special Agent
2)General Agent
3)Universal Agent
B) Mercantile Agent
1) Factor
2) Auctioneer
3) Broker
4)Commission Agent
 Duties of an Agent
1) To Carry out the work under taken
according to the direction given by the
principal
2) To carry out work with reasonable care
and diligence
3) To render accounts to the principal
4) To communicate with the principal in case
of difficulty
5) Not to deal on is on account:
if A acts without the knowledge of P
a) P may repudiate the contract
b) Claim benefit
6) To Pay sum received for the P
7) To protect and preserve the interests of
the P in case of his death or insolvency
8)Not to use information obtained in the
course of agency against the P
9)Not to make secret profit from agency
10) Not to set up an adverse title conversion
11) Not to put himself in a position where
interest and duty conflict
 Rights of an Agent
1) Rights of a retainer
2) Rights of receive remuneration
3) Rights of lien
4) Rights of indemnification
5) Rights of compensation
6) Rights to stoppage in transit
 Duties of Principal
1) To indemnify the agent against the
consequences of at lawful acts
2) To indemnify the agent against the
consequences of its done in good faith
3) To indemnify agent for injury caused by
principals neglect
4) To pay the agent the commission is other
remuneration agreed.
 Rights of the Principal
1)To recover damages
2)To obtain an account of secret profits
recover them and resist a claim of
remuneration
3) To resist agents claim for indemnity
 Creation of Agency
A) Agency by Express Agreement
B) Agency by Implied Agreement
1) inferred by circumstance
2) Things spoken / written
Implied agency includes
a) Agency by estoppel
b) Agency by holding out( positive or affirmative
act)
c) Agency by Necessity
i) Agent may exceed his authority
ii) A person entrusted with another’s property
iii) Husband and Wife
C) Agency by Ratification

Requisites of valid ratification :-

1) The A must purport to act as agent for a
principal who is in contemplation
2) The P must be in existence at the time of
contract (Kelner * Bayter)
3)The P must have contractual capacity both
at the time of contract and at the time of
ratification
4) Ratification must be with full knowledge of
facts
5) Ratification must be done within a
reasonable time
6) The act to be ratified must be lawful and
not void or illegal
7) The whole transaction must be ratified
8) Ratification must be communicated
9)Ratification can be of the acts which the P
have power the to do .
10) Ratification should not put third party to
damage
11) Ratification relates back to the date of the
act of the A