Contract Of Agency

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Contract Of Agency

  1. 1. Contract of Agency Agency is a relation based upon express or implied agreement where by one person is known as agent and the other person is known as principal.
  2. 2. Difference between Agent & Servant KR/MB/108 Agent Servant He has the authority to create commercial relationship between the principal & the third party He ordinarily has no such authority. He may work for several principal at a time. He ordinarily work for only one master at a time. He usually get commission He usually get salary or wages.
  3. 3. Features of Agency <ul><li>Intention to work for Principal </li></ul><ul><li>No consideration is necessary </li></ul><ul><li>Agreement between principal and agent </li></ul>KR/MB/108
  4. 4. Kinds of Agents KR/MB/108 On extent of their Authority On he nature of Work performance Universal Agents Special Agents General Agents Mercantile Agent Non-Mercantile Agent Broker Factor Commission Agent Auctioneer Del-credere Attorney Solicitor Wife Insurance Agent Election Agent Banker Agent
  5. 5. Creation of Agency <ul><li>Agency By Express Agreement </li></ul><ul><li>Agency By Implied Agreement </li></ul><ul><li>Agency By Ratification </li></ul><ul><li>Agency By operation of Law </li></ul>KR/MB/108
  6. 6. Agency By Implied Agreement <ul><li>Agency By Estoppels </li></ul><ul><li>Agency By Holding Out </li></ul><ul><li>Agency By Necessity </li></ul>KR/MB/108
  7. 7. Agency By Ratification (Meaning ) <ul><li>As per sec.196 of the Indian Contract Act agency by ratification is said to be arise when a person , on whose behalf the acts are done without his knowledge or authority, expressly or impliedly accept such acts. </li></ul>KR/MB/108
  8. 8. Essentials of Ratification <ul><li>Full knowledge (Sec198) </li></ul><ul><li>Whole transaction (sec199) </li></ul><ul><li>No damage to third party (Sec200) </li></ul><ul><li>Act on behalf of other person </li></ul><ul><li>Existence of principal </li></ul><ul><li>Within reasonable time </li></ul><ul><li>Lawful acts </li></ul><ul><li>Acts within Principal’s power </li></ul><ul><li>Communication </li></ul>KR/MB/108
  9. 9. Rights of an Agent <ul><li>Right to claim reimbursement of expenses </li></ul><ul><li>Right to receive remuneration </li></ul><ul><li>Right to indemnification against consequences of all lawful acts. </li></ul><ul><li>Right to indemnification against consequences of acts done in good faith. </li></ul><ul><li>Right to indemnification injuries caused by principal’s neglect. </li></ul><ul><li>Right of particular lien </li></ul>KR/MB/108
  10. 10. Duties of an Agent <ul><li>Duty to act according to directions or custom of trade (sec211) </li></ul><ul><li>Duty to act with reasonable care and skill (sec212) </li></ul><ul><li>Duty to render account (sec213) </li></ul><ul><li>Duty to communicate with principal and to obtain principal‘s instructions (sec214) </li></ul>KR/MB/108
  11. 11. Duties of an Agent <ul><li>Duty to disclose all material circumstances and to obtain the principal’s consent in dealings (sec215&216) </li></ul><ul><li>Duty to pay sum received for principal (sec217&218) </li></ul><ul><li>Duty to protect and preserve the interest entrusted to him (sec209) </li></ul><ul><li>Duty not to delegate (sec190) </li></ul>KR/MB/108
  12. 12. Authority of an Agent <ul><li>Lawful Acts </li></ul><ul><li>Emergency Authority </li></ul><ul><li>Ostensible Authority </li></ul>KR/MB/108
  13. 13. Termination of Contract of Agency <ul><li>By the principal revoking his authority </li></ul><ul><li>By the agent revoking the business of agency </li></ul><ul><li>By the business of the agency is completed </li></ul><ul><li>By the principal declared as insolvent </li></ul><ul><li>By mutual agreement </li></ul><ul><li>On death or on becoming of unsound mind of principal or agent </li></ul><ul><li>On expiry of fixed period </li></ul>KR/MB/108
  14. 14. Termination of Contract of Agency <ul><li>On destruction of subject matter </li></ul><ul><li>On dissolution of company </li></ul><ul><li>On principal becoming an alien anemy </li></ul>KR/MB/108
  15. 15. Practical Problems <ul><li>X the principal , instructed Y his agent to insure the goods . Y failed to do so and the goods are destroyed by the fire. Is Y liable to X ? </li></ul>KR/MB/108

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