The document discusses the law of agency under Indian law. It defines an agent as a person employed to act for or represent another person called the principal. Agency can be created expressly or implicitly, through ratification, estoppel, necessity or operation of law. A valid ratification requires the principal's full knowledge and communication to the contracting party within a reasonable time. A sub-agent acts under the control of the agent for the principal, while a substituted agent acts directly for the principal under the agent's authority. An agency terminates through agreement of the parties, by operation of law such as completion of the task, or death of the principal or agent. The document also outlines the rights and duties of the principal, agent and sub

1. LAW OF AGENCY
Course: LLB II
Subject : Special Contracts
Unit: I

2. AGENT
Sec 182 defines:
“ An agent as a person employed to do
any act for another , or to represent
another in dealings with third persons
the person for whom such act is done is
called the principal “.

3. ESSENTIALS OF
RELATIONSHIP OF AGENCY
• Agreement between principal &
agent
• Intention of agent to act on behalf of
the principal
• Anyone can be an agent
• Anyone can employ an agent

4. CREATION OF AGENCY
• BY EXPRESS AGREEMENT
• BY IMPLIED AGREEMENT
Agency by estoppel
Agency by holding out
Agency by necessity
• AGENCY BY RATIFICATION
• AGENCY BY OPERATION OF LAW

5. REQUISITES OF VALID
RATIFICATION
• Agent must act as an agent for his principal
• Principal must be in existence at the time of contract
• Ratification must be with full knowledge of facts
• Ratification should be done within a reasonable time of the
performance of the act
• The act to be ratified should be of lawful nature
• The ratification can be done only to the whole transaction & not
any part of it (Sec 199)
• Ratification should be communicated with the party to contract
• Ratification should not cause any damages to a third party
• Ratification can only be of acts which principal had the right to do

6. SUB-AGENT &
SUBSTITUTED AGENT
 A sub agent is a person employed & acting
under the control of the agent in the business of
the agency (Sec 191)
 A substituted agent is a person named by the
agent, on an express or implied authority from
the principal, to act for the principal (Sec 194)

7. DIFFERENCES BETWEEN SUB- AGENT &
SUBSTITUTE-AGENT
SUB-AGENT
1. He works under the
agent
2. There is no contact
between the agent &
the principal
3. Agent is wholly &
solely responsible for
the acts of the sub-
agent
SUBSTITUTE AGENT
1. He works under the
pprincipal
2. There is a contract
between him & the
principal
3. Agent is in no way
responsible for the
acts of the
substituted agent

8. Termination of agency
• By act of parties
 Agreement
 Revocation by the principal
 Revocation by the agent
• By operation of law
 Performance of the contract
 Expiry of time
 Death of either party
 Insanity of either party
 Insolvency of either party
 Destruction of the subject matter
 Principal becoming an alien enemy
 Dissolution of a company
 Termination of sub-agents authority

9. HOW IS AGENCY CONSTITUTED
• 1. Agency by agreement: (Secs. 186 and 187)
(i) Express
• (ii) Implied
• 2. Agent by necessity
• 3. Agency by estoppel or by holding out:
(Sec. 237)
• 4. Agency by operation of law:
• 5. Agency by ratification

10. RATIFICATION (Secs. 196 & 200)
• Ratification is adopting or accepting
subsequently a past act of an agent done on
behalf of another without authority.

11. CLASSIFICATION OF AGENTS
• CLASSIFICATION OF AGENTS
• 1. Specific or particular agent
• 2. General agent
• 3. Mercantile agents:
• 4. Sub-agent
• 5. Co-agent
• 6. Substitute agent

12. SUB-AGENTS
• SUB-AGENTS
• A ‘sub-agent’ is a person employed by, and
acting under the control of the original agent
in the business of the agency (Sec. 191).

13. RELATIONSHIP BETWEEN PRINCIPAL, AGENT
AND SUB-AGENT: (Secs. 192 & 193)
• (i) the principal is bound by and responsible
for the acts of a sub-agent; (ii) the agent is
responsible to the principal for the acts of the
sub-agent;
• (iii) the sub-agent is responsible for his acts to
the agent, but not to the principal
• except in case of fraud or wilful wrong.

14. Rights of agent
• Rights of agent
• 1. Right of retainer: (Sec. 217 )
• 2. Right to claim remuneration: (Sec. 219)
• 3. Right of lien: (Sec. 221)
• 4. Right to indemnity: (Secs. 222 & 223)
• 5. Compensation: (Sec. 225)
• 6. To do lawful things: (Sec. 188)
• 7. In emergency: (Sec. 189)
• 8. To appoint substitute agent: (Sec. 194)
• 9. To renounce agency: (Sec. 201)
• 10. Compensation for premature revocation: (Sec. 205)

15. Rights of Principal
• Rights of Principal
• 1. To repudiate contract: (Sec. 215)
• 2. To claim benefit: (Sec. 216)
• 3. To ratify or disown agent’s acts: (Sec. 196)
• 4. To revoke agent’s authority: (Sec. 203)
• 5. To claim loss or profit: (Secs. 211 & 212)
• 6. To demand accounts: (Sec. 213)
• 7. To refuse remuneration when agent is guilty of
misconduct: (Sec. 220)

16. References
• Avtar Singh : Contract Act, Eastern
• Beatson : Anson's Law of Contract, Oxford

17. Thank You