The Law of Agency

The Law of Agency - Transcript

THE LAW OF AGENCY
Essential elements of Agency
Appointment by the Principal
Authorised by the Principal
Principal answerable to third parties
Objective to establish relationship between Principal third parties
Relationship based on confidence consideration not necessary
Who may be an Agent Section 184
Who may be a Principal Section 183
Difference between an Agent and a servant
Difference between an Agent and an independent contractor
Kinds of Agents
Express or Implied Agents
General Special or Universal Agents
Agent or Sub agent
Mercantile Agents
Factor
Auctioneer
Broker
Commission Agent
Del credere Agent
Banker

Non mercantile Agents
counsel guardian promoter wife receiver
CREATION OF AGENCY
By express agreement Sections 186 187
By implication law
by estoppel
by holding out
by necessity

By ratification Section 196 197 199
action on behalf of the person ratifying
the Principal must be in existence
ratifier should be competent to ratify
transaction must subsist at the time of ratification
unconditional acceptance by the Principal
ratification may be express or implied
full knowledge of all the facts
entire transaction must be ratified
ratification to be made within a reasonable time
act to be ratified not to be void or illegal
ratification must be communicated
ratification must not injure a third person
ratification is with retrospective effect
SCOPE AND EXTENT OF AGENT S AUTHORITY Section 186
every lawful thing necessary Section 188
every lawful thing justified by the customs of the trade
protecting the interests of the Principal
SUB AGENT Section191

customs of the trade
because of the nature of agency
facts are purely ministerial no personal skill necessary
Agent has the express authority to appoint Sub Agents
Unforeseen emergencies
Principal knows about the appointment
AFFECT OF APPOINTMENT OF SUB AGENT Section192 193

Properly appointed
Principal is liable to third parties
Agent is responsible to the Principal
Sub Agent is not responsible to the Principal
Improperly appointed
Principal not answerable for the act of Sub agent
the Agent responsible to Principal as well as to third parties
the Sub agent is not responsible to the Principal at all
SUBSTITUTED AGENT Section 194
Difference between a Sub agent and a Substituted agent
Control
Delegation
Privity of contract
Responsibility
Continuity
AGENT S DUTY TO PRINCIPAL
duty to act according to Principal s direction Section 211
duty to act with the reasonable skill and diligence Section 212
duty to render accounts Section 213
duty to communicate Section 214
duty not to deal on his own account Sections 215 and 216
duty to pay over all monies Section 218
duty not to use information against the Principal
duty not to set up adverse title
duty not to delegate
RIGHTS OF AN AGENT

right to remuneration Sections 219 and 220
right of retainer Section 217
right of lien Section 221
right to be indemnified Section 222 and to 223
right to compensation Section 225
PRINCIPAL S LIABILITY FOR THE ACTS OF AGENT
when the Agent acts within the scope of his authority Section 226
when the Agent exceeds his authority Section 227 and 228
Principal bound by notice given to Agent Section 229
liability of Principal by estoppel Section 237
liability for misrepresentation on fraud by an Agent Section 238
AGENT S LIABILITY TO THIRD PARTIES
where the Agent acts for a foreign Principal
where the Agent acts for an undisclosed Principal
where the Agent acts for a disclosed Principal
where Agent s authority is coupled with interest
where an Agent receives or pays money by mistake or fraud
where the Agent signs negotiable instruments in his own name
where the Agent exceeds his authority
where the contract expressly provides
where an Agent acts for a non existing Principal
where according to trade usage an Agent is personally liable
TERMINATION OF AGENCY Section201 to 210

By the act of parties
Agreement
Revocation
Renunciation
By operation of law
completion of the business of agency
death or insanity of Principal or Agent
efflux of time
insolvency of the Principal
destruction of the subject matter of agency
subsequently event rendering the agency unlawful
dissolution of company

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Dr Subhash Gupta