Lecture 13 &14
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Lecture 13 &14

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Lecture 13 &14 Lecture 13 &14 Presentation Transcript

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