Presentation on theme: "DEFINITION OF AGENT AND PRINCIPAL"— Presentation transcript:
0 CONTRACT OF AGENCYChapter x (Secs. 182 to 238) of the Indian Contract Act, 1872
1 DEFINITION OF AGENT AND PRINCIPAL An ‘AGENT’ is a person employed to do any act for another or to representanother in dealings with third persons. The function of an agent is to bringhis principal Into contractual relations with third persons..PRINCIPALA person for whom the above act is done or who is so represented is calledthe ‘PRINCIPAL’
2 ESSENTIALS OF RELATIONSHIP OF AGENCY AGGREMENT B/W PRINCIPAL AND AGENT-:Agency depends on agreement but not necessarily on contract. Any person can become an agent b/w a principal and the third person.INTENTION OF AN AGENT TO ACT ON BEHALF OF THE PRINCIPAL
3 RULES OF AGENCY There are two important rules of agency: 1.Whatever a person can do personally, he can do throughan agent2.He who does an act through another does it by himself .
4 WHO CAN EMPLOY AN AGENT? WHO MAY BE AN AGENT? Acc. To sec 183 of ICA any person who is of age of majorityaccording to law to which is a subject, and who is of sound mindmay employ an agent.WHO MAY BE AN AGENT?Acc to sec 184 of ICA any person who is authorized to actsuch a person may be an agent. As the agent does not makecontracts on his own behalf it is not necessary that he shouldhave contractual capacity.
5 DIFFERENCE B/W AGENT & SERVANT An agent is employed to bring the principal into the legal relationswith the third persons or to represent him in dealings with thirdpersons.A servant does not ordinarily create legal relations b/wthe third person and the employer.An agent is bound to follow all the lawful instructions of theprincipal but he is not subject to the direct control andsupervision of principal. A servant acts under the direct controland supervision of his employer and is bound to follow all thereasonable orders given to him in the course of his employment.
6 Contnd...An agent may work for several principals at the same time butservant usually serves only one master.A principal is liable for the wrongs of his agent done within thescope of his authority. A master is liable for the wrongs of theservants if they are committed in the course of his employment.
7 CREATION OF AGENCYBy express agreementBy implied agreementAgency by ESTOPPLE.Agency by Holding out.Agency by necessity.3. By ratification
8 CLASSIFICATION OF AGENTS Classification according to extent of authoritySpecial AgentsGeneral agentsClassification according to nature of work performed by them1) Commercial or Mercantile Agent2) Non mercantile Agents
9 General AgentA General agent is one who is appointed to represent the principal in all the matters concerning a particular businessSpecial AgentA Special agent is one who is appointed to do some particular act or enter into some particular contract
10 Mercantile Agents Factor Auctioneer Del Credere Agent Pakka and Katcha adatiasIndentorBrokerCommission Agent
11 Possession of property Sell on credit and in his own name General lien FactorPossession of propertySell on credit and in his own nameGeneral lienCannot BarterCannot Delegate
12 Appointed to sell by auction Deliver goods on receipt of price AuctioneerAppointed to sell by auctionDeliver goods on receipt of priceRecover price from highest bidderCan file suit in his own nameParticular Lien
13 Del Credere Agent Pakka Adatias Agent as well as Guarantor Guarantees Principal and BrokerCan himself perform
14 Katcha Adatias Indentor Guarantees on the part of the Principal Procures a sale or purchase on behalf of the principal, with a merchant in the foreign country
15 Broker Commission Agent Engage to buy or sell the property Memorandum book- Sold and Bought noteCommission AgentEmployed to buy or sell or to Transact BusinessNot Liable for third party , Particular lienMay or may not have possession
16 Non Mercantile Agent Wife as an Agent Husband is not Liable Living together and looking for necessariesHusband is not LiableExpressly forbidden creditNot necessaryGiven moneyTrader is told expressly
17 If they live apart:-No fault of wife, liable to pay for her maintenanceOrUnder no justifiable Circumstances, she is not her Husband’s agent
18 Sub agent and Substituted Agents Sec 191:- Sub agent is employed by, and acting under the control of the original agent in the business of the agencySec 194:- Where an agent, holding an expressed or implied authority to name another person has named another person, such person is agent of the principal for such part of the business of the agency as is entrusted to him.
19 DUTIES OF AGENTTo carry out the work undertaken according to the directions given by theprincipal.To carry out the work with reasonable care, skill and diligence.To communicate with the principal in the case of difficulty.To pay sums received for the principal.To protect and preserve the interests of the principal in the case of his death or insolvency.Not to make secret profit from agency .Not to set up an adverse title.Not to use information obtained in the course of the agency against the
20 2. Right to receive remuneration. 3. Right of lien. RIGHTS OF AGENT1. Right of retainer.Right to receive remuneration.Right of lien.Right of indemnification.Right of compensation.
21 DUTIES OF PRINCIPALTo indemnify the agent against the consequences of all lawful actsTo indemnify the agent against the consequences of acts done in good faithTo indemnify the agent for injury caused by principal’s neglect.To pay the agent the commission other remuneration agreed.
22 RIGHTS OF PRINCIPAL 1)To recover damages. 2)To obtain an account of secret profits and recover them and resist aclaim for remuneration.3) To resist agent’s claim for indemnity against liability incurred.
23 TERMINATION OF AGENCY By act of the parties AgreementRevocation by the principalRevocation by the agent
24 TERMINATION OF AGENCY CON’T 2. By operation of lawPerformance of the contractExpiry of the timeDeath of either partyInsanity of either partyInsolvency of either partyDestruction of the subject matterPrincipal becoming an alien enemyDissolution of a company
25 Agency Coupled with interest Agency is coupled with interest when authority is given for the purpose of securing some benefits to the agent.The agency cannot, unless there is an express contract, be terminated to the prejudice of such interest (Sec 202). It becomes irrevocable to the extent of such interest and does not terminate even by the insanity or death of the principal.In other words, where the agent himself has an interest in the subject matter of the agency, the agency is one coupled with interest.