CONTRACT OF AGENCY Agency is a relation based upon express or implied agreement where by one person is known as agent and the other person is known as principal.
DIFFERENCE BETWEEN AGENT & SERVANT Agent
Servant
He has the authority to create He ordinarily has no such commercial relationship authority. between the principal & the third party
He may work for several He ordinarily work for only principal at a time. one master at a time. He usually get commission
He usually get salary or wages.
FEATURES OF AGENCY Intention to work for Principal No consideration is necessary Agreement between principal and agent
Kinds of Agents
On he nature of Work performance
On extent of their Authority
General Agents
Special Agents
Universal Agents
Non-Mercantile Agent
Mercantile Agent
Solicitor Broker
Factor
Commission Agent
Auctioneer
Banker Agent
Wife
Del-credere Attorney
Insurance Agent Election Agent
CREATION OF AGENCY Agency By Express Agreement Agency By Implied Agreement Agency By Ratification Agency By operation of Law
AGENCY BY IMPLIED AGREEMENT Agency By Estoppels Agency By Holding Out Agency By Necessity
AGENCY BY RATIFICATION (MEANING ) As per sec.196 of the Indian Contract Act agency by
ratification is said to be arise when a person , on whose behalf the acts are done without his knowledge or authority, expressly or impliedly accept such acts.
ESSENTIALS OF RATIFICATION
Full knowledge (Sec198) Whole transaction (sec199) No damage to third party (Sec200) Act on behalf of other person Existence of principal Within reasonable time Lawful acts Acts within Principal’s power Communication
RIGHTS OF AN AGENT Right
to claim reimbursement of expenses Right to receive remuneration Right to indemnification against consequences of all lawful acts. Right to indemnification against consequences of acts done in good faith. Right to indemnification injuries caused by principal’s neglect. Right of particular lien
DUTIES OF AN AGENT Duty to act according to directions or custom of trade (sec211) Duty to act with reasonable care and skill (sec212) Duty to render (sec213) Duty to communicate with principal and to obtain principal‘s instructions (sec214)
DUTIES OF AN AGENT Duty to disclose all material circumstances and to obtain the principal’s consent in dealings (sec215&216) Duty to pay sum received for principal (sec217&218) Duty to protect and preserve the interest entrusted to him (sec209) Duty not to delegate (sec190)
AUTHORITY OF AN AGENT Lawful Acts Emergency Authority Ostensible Authority
TERMINATION OF CONTRACT OF AGENCY By
the principal revoking his authority By the agent revoking the business of agency By the business of the agency is completed By the principal declared as insolvent By mutual agreement On death or on becoming of unsound mind of principal or agent On expiry of fixed period
TERMINATION OF CONTRACT OF AGENCY On destruction of subject matter On dissolution of company On principal becoming an alien anemy
PRACTICAL PROBLEMS
X the principal , instructed Y his agent to insure the goods . Y failed to do so and the goods are destroyed by the fire. Is Y liable to X ?