Agreement between principal and agent
The person must act in representative
The principal must be competent to contract.
Agent may not be competent to contract.
No consideration required.
All acts which a person can do himself can be
Agency is based on the principal – “ he who
does the thing through another does it himself.
Every person working for another is not an
No consideration is necessary
Fact that principal has agreed to be represented
by the agent is a sufficient ‘detriment’ to the
principal to support the contract of agency
Usually an agent is paid for his services.
An agency may be created in any of the
CREATION OF AGENCY
Agent appointed by words of mouth or by an
agreement in writing.
Power of attorney is the usual form of a
written contract of agency.
No express agreement
Inferred from the circumstances of the case or
from conduct of the parties or from
relationship between the parties.
Such an agency may take the following forms:
*Agency by Estoppel
*Agency by Holding out
*Agency by necessity
Based on ‘Doctrine Of Estoppel’.
When an agent has, without authority, done acts
or incurred obligations to third persons on behalf
of his principal . The principal is bound by such
acts or obligations, if he has by his words or
conduct induced such third person to believe that
such acts and obligations were within the scope of
Based on ‘Doctrine of Holding Out’ which is a
part of the law of estoppel.
It’s almost same as agency by estoppel
But unlike ‘agency by estoppel’, it requires some
affirmative or positive act or conduct by the
principal to establish agency subsequently.
In certain circumstances the law confers an authority on one person
to act as agent for another without any regard to the consent of the
principal. Such an agency is called agency by necessity.
Where the agent exceeds his authority, bona fide, in an emergency
Where the carrier of goods acting as bailee, does anything to protect
or preserve the goods, in an emergency
Where a husband improperly leaves his wife without providing
proper means for her sustenance
Section 196 deals with the effect of ratification.
Ratification means the subsequent adoption and
acceptance of an act originally done without
instructions or authority.
Ratification relates back to the time of contract that
is ratification has retrospective effect.
According to Section 197, ratification may be
express or implied.
o The agent must purport to act as agent for
a principal who is in contemplation.
oThere should be act capable of
oThe principal must be in existence.
o The principal must be competent to
The principal must have full knowledge of
Whole transaction must be ratified.
Ratification must be done with in a
reasonable time of the act purported to be
Ratification must not injure a third person.
The authority of an agent means his capacity
to bind the principal to third parties. The
scope of agents authority is determined by
Express actual authority
Implied actual authority
Authority in Emergency
According to Section 230 an agent cannot personally
enforce contracts entered into by him on behalf of the
principal, nor he can be personally liable for them,
unless there is a contract to the contrary.
Where the agent expressly agrees
Where the agent acts for a foreign principal
Where the agent acts for an unnamed principal
Where the agent acts for an undisclosed
Where the agent acts for a principal who cannot
Where the agent exceeds his authority
Where there is a trade usage or custom
Where agent’s authority is coupled with interest