Contract Of Agency 3y6s5x

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 ?