Lecture 13 &14

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Lecture 13 &14

  1. 1. Contract<br /> of <br />Agency<br />
  2. 2. Contracts of Agency<br /> Sec 182 of the Indian contract act,1872 defines Agentand Principal as:<br />Agent means a person employed to do any act for another or to represent another in dealing with the third persons and <br />The principal means a person for whom such act is done or who is so represented.<br />
  3. 3. TEST OF AGENCY<br />The question as to whether a particular persons is an agent can be verified by finding out if his acts bind the principal or not<br />
  4. 4. Creation of agency<br />Any person who is of the age of majority and is of sound mind may employ an agent.(section183)<br />Between the principal and the third persons, any person may become an agent. Even a minor can become an agent.(184)<br />No consideration is necessary to create an agency.(185)<br />
  5. 5. Creation of agency<br />Express Agreement<br />Implied Agreement<br />By Ratification<br />By Operation of Law<br />
  6. 6. Types of Implied Agency<br />Agency by Estoppel<br />Agency by Holding out<br />Agency by Necessity<br />
  7. 7. 3. Agency by ratification<br />Essentials of valid ratification<br />(i) Act on behalf of the person ratifying the act<br />(ii) Existence of principal <br />(iii) Contractual capacity of principal<br />(iv) Ratification with full knowledge of facts<br />(v) Ratification within reasonable time<br />(vi) Act must be lawful<br />
  8. 8. (vii) Ratification must be communicated<br />(viii) Ratification of whole transaction<br />(ix) No damage to third party<br />(x) Ratification relates back to the date of ratification<br />4. Agency by operation of law<br />
  9. 9. Classification of agents<br />Special agents<br />General agents<br />Universal agents<br />
  10. 10. On the basis of nature of work agents can be<br />Mercantile agent:<br />Factor : general lien<br />Auctioneer : particular lien<br />Broker or Commission agent: no lien <br />Del creder agents: Both guarantor and agent<br /> Banker<br />
  11. 11. 2. Non mercantile agent<br />Solicitor<br />Insurance agent<br />Wife<br />
  12. 12. Duties of an agent:<br />To carry out the work as per the directions of principal<br />To carry out work with reasonable care<br />To render proper accounts to principal<br />To communicate with the principal in case of difficulty<br />Not to deal on his own account<br />To pay sums received for the principal <br />
  13. 13. 7. To protect the interests of the principal in case of his death or insolvency of the <br />8. Not to use information obtained to the course of agency against principal<br />9. Not to make secret profit from agency<br />10. Not to set up adverse title<br />11. Not to put himself in a position where interest and duty conflict<br />12. Not to delegate authority<br />
  14. 14. Rights of agent:<br />Right of retainer<br />Right to receive remuneration<br />Right of lien<br />Right of indemnification<br />Right of compensation<br />Right of stoppage in transit<br />
  15. 15. Duties of principal<br />To indemnify the agent against the consequences of all unlawful acts<br />To indemnify the agent against the consequences of acts done in good faith<br />To indemnify agent for injury caused by principal’s neglect<br />To pay the agent the commission or other remuneration agreed<br />
  16. 16. Rights of principal<br />To recover damages<br />To obtain an account of secret profits and recover them and resist a claim for remuneration<br />To resist agent’s claim for indemnity against liability incurred<br />
  17. 17. Personal Liability of agent<br />When contract expressly provides<br />Agent acts for foreign principal<br />Agent acts for undisclosed principal<br />When principal can not be sued<br />Where agent signs contract in his name<br />Principal is not in existence<br />Liable for breach of warranty of authority<br />When he pays or receives money by mistake<br />
  18. 18. 9. Authority is coupled with interest<br />10. Trade makes agent personally liable<br />
  19. 19. Termination of Agency<br />A. By the act of parties<br />1. Agreement <br />2. Revocation of authority by the principal<br />3. Revocation by the agent<br />
  20. 20. B. By Operation of Law:<br />Performance of contract<br />Death and insanity<br />Expiry of time<br />Insolvency<br />Destruction of subject matter<br />Principal becoming alien enemy<br />Dissolution of company<br />
  21. 21. Irrevocable agency<br />Agency coupled with interest<br />Where the agent has incurred a personal liability<br />Where the agent has partly exercised the authority<br />
  22. 22. THANK YOU<br />11<br />

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