Law of agency ppt @ bec doms

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Law of agency ppt @ bec doms

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Law of agency ppt @ bec doms

  1. 1. Law of Agency <ul><li>Who is an Agent and a Principal? (Sec. 182) </li></ul><ul><li>An Agent is a person employed to do an act for another or to represent another in dealings with third persons. </li></ul><ul><li>The person for whom such act is done, or who is so represented, is the Principal . </li></ul><ul><li>The relationship between them is called Agency . </li></ul>
  2. 2. <ul><li>Who can be appointed an Agent? </li></ul><ul><li>Any major person and of sound mind may become an agent to be responsible to the Principal. </li></ul><ul><li>There is no bar to the appointment of a minor as an Agent but a minor, however, cannot be held personally liable. </li></ul><ul><li>The concept of a servant may, in a sense involve an element of agency but on that account a servant is not regarded as an agent and an agent is never a servant. </li></ul><ul><li>It is a matter of control and supervision. </li></ul>
  3. 3. <ul><li>Who can employ an Agent? </li></ul><ul><li>A person who is of the age of majority and is of sound mind may employ an Agent (Section 183). No consideration is necessary to create an agency (Section 185). </li></ul><ul><li>Test of Agency: It is whether a person has the capacity to bind the Principal by acts done on his behalf. </li></ul><ul><li>It is the power of an agent to make the principal answerable to third person that determines existence of agency. </li></ul>
  4. 4. Creation of Agency <ul><li>Agency by agreement (Section 186 & 187). </li></ul><ul><li>Agency by necessity. </li></ul><ul><li>Agency by holding out (Section 237). </li></ul><ul><li>Agency by operation of law. </li></ul><ul><li>Agency by ratification </li></ul><ul><li>Ratification is adopting or accepting subsequently a past act of an agent done on behalf of another w/o authority. It is subsequent confirmation of unauthorized acts. </li></ul>
  5. 5. Rules Governing Ratification <ul><li>Act must be done by a person on behalf of another. </li></ul><ul><li>Act must have been done w/o knowledge or authority of the person on whose behalf the act is done. </li></ul><ul><li>Person must be legally in existence. </li></ul><ul><li>May be expressed/implied by conduct of the person. </li></ul><ul><li>Act to be ratified must not be void ab-initio. </li></ul>
  6. 6. <ul><li>Principal must be competent to ratify both at the time of contract and at time of ratification. </li></ul><ul><li>It must be done within a reasonable time. </li></ul><ul><li>It can be for whole contract and not part of it. </li></ul><ul><li>It should not put a third party to damages. </li></ul>
  7. 7. Classification of Agents <ul><li>Specific or Particular Agent: Appointed to do a single act for the Principal. Also called a Special Agent. </li></ul><ul><li>General Agent: Appointed to do all acts concerning a particular trade or business of the Principal. </li></ul><ul><li>Mercantile Agents: Broker, Commission Agent, Factor (authority to sell to 3 rd person), Auctioneer, Del-credere Agent (extra commission). </li></ul>
  8. 8. <ul><li>Sub-agent: An agent appointed by the original agent. </li></ul><ul><li>Co-agent: Two or more persons appointed as agents by the Principal to act as such jointly or severally. </li></ul><ul><li>Substitute Agent: Where an agent holding an express/implied authority to name another person accordingly, as part of the business of the agency as is entrusted to him. He is an agent of the Principal. </li></ul>
  9. 9. Agent’s Authority <ul><li>Agent’s capacity to bind the Principal is his authority. </li></ul><ul><li>Agent does certain acts on behalf of the principal. </li></ul><ul><li>His authority extends to such acts authorized. </li></ul><ul><li>The authority of an agent may be express or implied (Section 186). </li></ul>
  10. 10. Revocation of Agent’s Authority <ul><li>Revocation by Principal: Can at anytime before the authority has been exercised so as to bind the Principal (Section 203). </li></ul><ul><li>Notice must be given before revoking the authority, otherwise Agent will be entitled to damages (Section 206). </li></ul><ul><li>A empowers B to let A’s house. Afterwards A lets it to himself. This is revocation of B’s authority and is implied. </li></ul>
  11. 11. When Agency cannot be revoked? <ul><li>Agent has exercised authority partly. </li></ul><ul><li>Agency coupled with interest: A gives authority to B to sell A’s land, and to pay himself, out of the proceeds (to the debt due to him from A) . A cannot revoke this authority, nor can it be terminated by his insanity or death. </li></ul><ul><li>When Agent is personally liable. </li></ul>
  12. 12. Duties of an Agent <ul><li>To conduct Principal’s business. </li></ul><ul><li>Conduct the business with skill & diligence. </li></ul><ul><li>To render proper accounts. </li></ul><ul><li>To pay sums received to the Principal. </li></ul><ul><li>To communicate with Principal. </li></ul><ul><li>On Principal’s death or insanity. </li></ul><ul><li>Not to deal on his own account. </li></ul><ul><li>Use of information not against Principal. </li></ul><ul><li>No secret profit. </li></ul><ul><li>Not to delegate. </li></ul><ul><li>Naming another agent for principal. </li></ul><ul><li>Liable for acts of sub-agents. </li></ul><ul><li>Liable for misrepresentations or fraud. </li></ul><ul><li>Liable for damages. </li></ul>
  13. 13. Agent’s Rights <ul><li>Right to retain all moneys due to him. </li></ul><ul><li>Right to claim remuneration. </li></ul><ul><li>Right to lien. </li></ul><ul><li>Right to indemnity. </li></ul><ul><li>Right to be compensated. </li></ul><ul><li>In emergency: to do such act as to protect Principal from loss. </li></ul><ul><li>To appoint substitute agent. </li></ul><ul><li>To renounce agency. </li></ul><ul><li>Compensation for premature revocation. </li></ul>
  14. 14. Principal’s Duties & Liabilities <ul><li>To indemnify the agent. (i) Against consequences of lawful act, and (ii) Against consequences of the acts done in good faith. </li></ul><ul><li>Compensate for injury caused. </li></ul><ul><li>To pay remuneration and dues. </li></ul><ul><li>Misrepresentation or fraud by Agent: Is not liable if act falls beyond Agent’s authority. </li></ul><ul><li>Liable for contracts entered into by Agent with third persons. </li></ul><ul><li>Notice to the Agent is imputed notice to Principal. </li></ul>
  15. 15. Principal’s Rights <ul><li>To Repudiate contract (Section 215). </li></ul><ul><li>To claim benefits (Section 216). </li></ul><ul><li>To ratify or disown agent’s acts (Section 196). </li></ul><ul><li>To revoke Agent’s authority (Section 203) </li></ul><ul><li>To claim on loss or profit (Section 211 & 212). </li></ul><ul><li>To demand accounts (Section 213). </li></ul><ul><li>To refuse remuneration when agent is guilty of misconduct (Section 220). </li></ul>
  16. 16. Termination of Agency <ul><li>By act of parties: By agreement; By revocation and renunciation; By completion of performance. </li></ul><ul><li>By operation of law: By death or insanity; By insolvency of the principal. </li></ul><ul><li>Other modes of termination: By efflux of time (fixed period); By destruction of the subject-matter; By incapacity of Principal or Agent; Principal and Agent becoming alien enemy; By object of Agent becoming unlawful. </li></ul>

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