Contract-Of-Agency by Kamaljeet (402)

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Transcript of Contract-Of-Agency by Kamaljeet (402)

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    Contracts

    of

    Agency

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    Contracts of Agencyy Sec 182 of the Indian contract act,1872 defines Agent

    and Principal as:

    y Agentmeans a person employed to do any act foranother or to represent another in dealing with thethird persons and

    y The principalmeans a person for whom such act is

    done or who is so represented.

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    Contracts of Agencyy An agent does not act on his own behalf but acts on

    behalf of his principal. He either represents his

    principal in transactions with third parties or perform

    san act for the principal. The question as to whether aparticular persons is an agent can be verified byfinding out if his acts bind the principal or not

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    Creation of agency

    y Any person who is of the age ofmajority and is of soundmind may employ an agent.(section183)

    y Between the principal and the third persons, any person

    may become an agent. But no person who is aminor andof unsound mind can become an agent.(184)

    y No consideration is necessary to create an agency.(185)y It is not essential that a contract of agency be entered in

    to. It is sufficient if a person acts on behalf of another

    and is accepted by the latter.

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    Creation of agencyy An agency can be created either in writing or orally.

    An oral appointment is a valid appointment even

    though the contract of agency by which agent isauthorized has to be in writing.

    y Creation ofAgency

    1. Express Agreement

    2. Implied Agreement

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    Types of Implied Agencyy Agency by Estoppel or Holding out

    y Agency by Necessity

    y Agency in Emergencyy Agency by Ratification

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    Types of Mercantile Agentsy Factor

    y Commission agent

    y Del credereAgenty Broker

    y Auctioneer

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    RIGHTS AND DUTIES OF PARTIESy Duties ofAgenty An agent is bound to conduct the business of his principal

    according to the directions given, or in the absence of directions,according to the custom.

    y An agent is bound to conduct the business of the agency with asmuch skill as is generally possessed by persons engaged in similarbusiness unless the principal has notice of his want of skill.

    y An agent is bound to render proper accounts to his principal, andhas duty, irrespective of any contract to that effect, to produce

    vouchers by which items of disbursement are supported as part ofthe obligation to render proper accounts to the principal ondemand.(section213)

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    RIGHTS AND DUTIES OF PARTIES

    y It is duty of an agent in cases of difficulty, to use allreasonable diligence in communicating with his

    principal and seeking to obtain his instruction(section214)

    y An agent should not set up an adverse title to the goodswhich he receives from the principal as an agent.

    y A

    n agent is duty bond to pay sum

    s received to theprincipal on his account.

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    RIGHTS AND DUTIES OF PARTIESy An agent must not use confidential information entrusted to him

    by his principal for his own benefit or against the principal.

    y The agentmust notmake secret profit from the extract agency. He

    must disclose any extra profit that he maymake.y An agentmust not allow his interest conflict with his duty. For

    example, hemust not compete with his principal.

    y An agentmust not delegate his authority to a sub-agent . This ruleis based on the principle Delegatus non protest delegare adelegate cannot further delegate(section190).

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    RIGHTS OF AGENTy The agent has a right to retain any sums received on

    account of the principal in the business of the agency, allmoneys due to himself in respect of his remuneration

    and advances made or expenses properly incurred byhim in conducting such business.

    y The agent has a right to receive remuneration.

    y Right of lien: In the absence of any contract to the

    contrary, an agent is entitled to retain goods, papers andother property.

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    RIGHTS OF AGENTy The employer of an agent is bound to indemnify him against the

    consequences of all lawful acts done by such agent in exercise of theauthority conferred upon him.

    y

    Where he has bought goods for his principal by incurring apersonal liability, he has a right of stoppage in transit against theprincipal, in respect of the money which he has paid or is liable topay.

    y Where he is personally liable to the principal for the price of thegoods sold, he stands in the position of an unpaid seller towards the

    buyer and can stop the goods in transit on the insolvency of thebuyer.

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    RIGHTS OF PRINCIPALy Right to repudiate the Transaction

    y To claim any resulted benefit fromAgency

    y Right to Recover Damagesy To Resist Agents claim for Indemnity

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    DUTIES OF PRINCIPALy To indemnify against consequences of all lawful acts of

    agent

    yTo indemnify the agent against consequences of actsdone in good faith

    y To pay compensation against agents injury

    y To pay the agent the commission or other

    remuneration agreed.

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    TERMINATION OF AGENCYy According to section 201, an agency is terminated by:

    y By an agreement between the parties, or

    y By the principal revoking his authority; ory By the agent renouncing the business of agency; or

    y By the business of agency being completed; or

    y By either the principal or the agent dying or becoming of

    unsound mind; or

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    TERMINATION OF AGENCYy By the principal being adjudicated an insolvent under

    the provisions of anyAct for the time being in force for

    relief of insolvent debtors.

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    AGENCY MAY BE TERMINATED BYy Agreement

    y Revocation of authority by the principal

    y By operation of Law

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    By operation of Lawy On performance of the contract. Where an agent is appointed to

    perform a specified transaction, his authority comes to an end onthe completion of the said transaction.

    y On expiry of time.y When the agent or the principal dies or becomes of unsound mind.

    The death of the agent terminates his authority.y The death of one of the joint agents will terminate the agency only

    as far as he is concerned, while it will continue to be valid as regardsthe other surviving agents in the absence of contrary intention.

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    BY OPERATION OF LAWy On the insolvency of the principal

    y On the destruction of the subjectmatter.

    y On the principal becoming an alien enemy.y On the dissolution of a company.

    y On termination of sub-agents authority.

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    EXCEPTIONS

    y Irrevocable Agency:- When an agency cannot beput an end to, it is said to be irrevocable agency. Anagency is irrevocable where the agent himself has aninterest in the property which forms the subject-

    matter of the agency.y Time when Termination takes Effect:- The

    termination of the authority of an agent does not, sofar as regards the agent, take effect before it becomesknown to him. As regards third persons, it

    terminates when it comes to their notice.

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    Thank you