Contract of Agency

Agent and Principal

• 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 relationship between an agent and a principal is called an

“Agency.” An agent therefore brings together his principal and a
third person.

• Ex- A appoints B to Purchase a house for him. A is the principal, B

is an agent and the relationship between them is that of Agency.
 Modes of Creating Agency
• By Expression
• By Implication
• By Estoppel
• By Holding out
• By Necessity
• By Ratification
 Types of Agents
• Special
• General
• Mercantile
• Broker
• Commission Agent
• Del Credere Agent (Guarantor cum Agent)
• Auctioneer
• Banker
• Pakka Arhatia
• Kachcha Arhatia

• Non Mercantile
 Rights of an agent
• Right to Remuneration
• Right of Retainer
• Right of Lien
• Right of stoppage in transit
• Right to be indemnified
• Right to compensation for Injury caused by
negligence of the Principal
 Duties of an Agent
• To follow the instructions of the Principal
• To conduct the business with skill and diligence
• To submit proper accounts
• Contact the principal in case of difficulty
• Not to make any secret profit
• Not to deal on his own account
• Not entitled to remuneration for the business misconducted
• Not to diclose any confidentail information
• On the death of the principal, take all reasonable steps on
behalf of representatives
 Termination of an Agency
• By Revocation by the Principal
• On the expiry of fixed period of time
• On the performance of the specific purpose, or else,
when the performance of that specific act becomes
impossible
• Insanity or death of the principal or the agent
• When the subject matter is destroyed or is rendered
unlawful
• In the event of insolvency by the principal
• By renunciation of the agency by the agent