PPT on "Agency" for BBA & B.Com 1st year students, CA, CPT, CS & CMA Foundation. Business Law PPT by Sandeep Sharma. Meaning with suitable example & explanation.

1. AGENCY
CHAPTER – 18
PART 2 PPT by Sandeep Sharma

2. 1. Act on behalf of supposed principal: the act must have been
done for the supposed principal.
A B & C
Purchase
Ratify (approve)
(auth.)
Agency by Ratification
Rules of Valid Ratification
Supplier ‘Y’

3. 2. Existing principal: the principal must have been in
existence at the time of doing the act.
Agency by Ratification
Rules of Valid Ratification
3. Contractual capacity of the principal: principal must be
capable of making a contract both at the time of Making of
contract & at the time of ratification.
4. Full knowledge of all facts: a ratifier must have full
knowledge of all the facts & material circumstances in which
the act is done.

4. 5. Within reasonable time: ratification will not be effective if it
made after the reasonable time has expired.
Agency by Ratification
Rules of Valid Ratification
6. Lawful acts: an agreement which is void in law/illegal
cannot be ratified.
7. Whole transaction: no partial transaction can be ratified.
8. No conditional ratification: principal can’t put any condition
at the time of ratification otherwise it creates a new contract.

5. 9. Authority to ratify: only that person can ratify the act of
another who himself had authority to do the act.
Agency by Ratification
Rules of Valid Ratification
10. No damage to third party: Eg:- if B & C also ordered goods
from Supplier ‘Z’ on credit, then they can’t cancel it, just for the
sake to ratify the purchase from supplier ‘Y’.
11. Act relating to existing thing: there must be something
tangible & existing. Eg:- if a lease contract is ratified after
expiry, then there no use of ratification.

6. Agency by Ratification
Rules of Valid Ratification
12. Communication: the ratification is effective only when it
is communicated to the agent.
Communication of ratification may be ‘Express or Implied’.
Express when it is written or spoken &
When a principal accepts the benefits provided by the act of an
agent. It is the evidence of implied ratification.

7. Agent
To retain, like: advances
made, expenses for
conducting the business etc.
To receive remuneration
agreed upon.
Also entitled to retain
goods, papers etc.
To get compensation ,
caused by principal’s
neglect.
Principal
Direct the agent for the
conduct of his business.
To demand proper
accounts of the business of
agency.
To claim all amount taken
by agent on his behalf.
To get compensation ,
caused by agent’s neglect.
‘Rights’ of an Agent & a Principal

8. Agent
To conduct business as per
principal’s direction.
To conduct business with
skill.
To communicate with
principal.
To compensate for neglect,
misconduct etc.
Principal
To pay remuneration to his
agent.
To compensate against the
consequences of lawful
acts.
To compensate against the
consequences of acts done
in good faith.
‘Duties’ of an Agent & a Principal

9. Agent
Not to delegate his
authority to another.
Not to use information
against the principal.
Not to make secret profits
from agency.
Liable for fraud or
misrepresentation etc.
Principal
To compensate in respect
of injury caused by his
neglect.
‘Duties’ of an Agent & a Principal

10. End of Part - 2
PPT by Sandeep Sharma