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.

DIFFERENCE BETWEEN AGENT & SERVANT Agent Servant

He has the authority to create He ordinarily has no such commercial relationship authority. between the principal & the third party

He may work for several He ordinarily work for only principal at a time. one master at a time. He usually get commission He usually get salary or wages.

FEATURES OF AGENCY
Intention to work for Principal No consideration is necessary Agreement between principal and agent

Kinds of Agents

On extent of their Authority

On he nature of Work performance

General Agents

Special Agents

Universal Agents

Mercantile Agent

Non-Mercantile Agent

Solicitor Broker Factor Commission Agent Auctioneer Del-credere Attorney

Wife

Banker Agent

Insurance Agent Election Agent

CREATION OF AGENCY
Agency By Express Agreement Agency By Implied Agreement Agency By Ratification Agency By operation of Law

AGENCY BY IMPLIED AGREEMENT

Agency By Estoppels Agency By Holding Out Agency By Necessity

AGENCY BY RATIFICATION (MEANING )

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.

ESSENTIALS OF RATIFICATION

Full knowledge (Sec198) Whole transaction (sec199) No damage to third party (Sec200) Act on behalf of other person Existence of principal Within reasonable time Lawful acts Acts within Principals power Communication

RIGHTS OF AN AGENT
Right

to claim reimbursement of expenses Right to receive remuneration Right to indemnification against consequences of all lawful acts. Right to indemnification against consequences of acts done in good faith. Right to indemnification injuries caused by principals neglect. Right of particular lien

DUTIES OF AN AGENT
Duty to act according to directions or custom of trade (sec211) Duty to act with reasonable care and skill (sec212) Duty to render account (sec213) Duty to communicate with principal and to obtain principals instructions (sec214)

DUTIES OF AN AGENT
Duty to disclose all material circumstances and to obtain the principals consent in dealings (sec215&216) Duty to pay sum received for principal (sec217&218) Duty to protect and preserve the interest entrusted to him (sec209) Duty not to delegate (sec190)

AUTHORITY OF AN AGENT
Lawful Acts Emergency Authority Ostensible Authority

TERMINATION OF CONTRACT OF AGENCY

By

the principal revoking his authority By the agent revoking the business of agency By the business of the agency is completed By the principal declared as insolvent By mutual agreement On death or on becoming of unsound mind of principal or agent On expiry of fixed period

TERMINATION OF CONTRACT OF AGENCY

On destruction of subject matter On dissolution of company On principal becoming an alien anemy

PRACTICAL PROBLEMS

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 ?