0. CONTRACT OF AGENCY
Chapter 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 represent
another in dealings with third persons. The function of an agent is to bring
his principal Into contractual relations with third persons. .
PRINCIPAL
A person for whom the above act is done or who is so represented is called
the ‘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 through
an agent
2.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 majority
according to law to which is a subject, and who is of sound mind
may employ an agent.
WHO MAY BE AN AGENT?
Acc to sec 184 of ICA any person who is authorized to act
such a person may be an agent. As the agent does not make
contracts on his own behalf it is not necessary that he should
have contractual capacity.

5. DIFFERENCE B/W AGENT & SERVANT
An agent is employed to bring the principal into the legal relations
with the third persons or to represent him in dealings with third
persons.
A servant does not ordinarily create legal relations b/w
the third person and the employer.
An agent is bound to follow all the lawful instructions of the
principal but he is not subject to the direct control and
supervision of principal. A servant acts under the direct control
and supervision of his employer and is bound to follow all the
reasonable orders given to him in the course of his employment.

6. Contnd...
An agent may work for several principals at the same time but
servant usually serves only one master.
A principal is liable for the wrongs of his agent done within the
scope of his authority. A master is liable for the wrongs of the
servants if they are committed in the course of his employment.

7. CREATION OF AGENCY
By express agreement
By implied agreement
Agency by ESTOPPLE.
Agency by Holding out.
Agency by necessity.
3. By ratification

8. CLASSIFICATION OF AGENTS
Classification according to extent of authority
Special Agents
General agents
Classification according to nature of work performed by them
1) Commercial or Mercantile Agent
2) Non mercantile Agents

9. General Agent
A General agent is one who is appointed to represent the principal in all the matters concerning a particular business
Special Agent
A 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 adatias
Indentor
Broker
Commission Agent

11. Possession of property Sell on credit and in his own name General lien
Factor
Possession of property
Sell on credit and in his own name
General lien
Cannot Barter
Cannot Delegate

12. Appointed to sell by auction Deliver goods on receipt of price
Auctioneer
Appointed to sell by auction
Deliver goods on receipt of price
Recover price from highest bidder
Can file suit in his own name
Particular Lien

13. Del Credere Agent Pakka Adatias Agent as well as Guarantor
Guarantees Principal and Broker
Can 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 note
Commission Agent
Employed to buy or sell or to Transact Business
Not Liable for third party , Particular lien
May or may not have possession

16. Non Mercantile Agent Wife as an Agent Husband is not Liable
Living together and looking for necessaries
Husband is not Liable
Expressly forbidden credit
Not necessary
Given money
Trader is told expressly

17. If they live apart:-
No fault of wife, liable to pay for her maintenance Or
Under 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 agency
Sec 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 AGENT
To carry out the work undertaken according to the directions given by the
principal.
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 AGENT
1. Right of retainer.
Right to receive remuneration.
Right of lien.
Right of indemnification.
Right of compensation.

21. DUTIES OF PRINCIPAL
To indemnify the agent against the consequences of all lawful acts
To indemnify the agent against the consequences of acts done in good faith
To 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 a
claim for remuneration.
3) To resist agent’s claim for indemnity against liability incurred.

23. TERMINATION OF AGENCY By act of the parties
Agreement
Revocation by the principal
Revocation by the agent

24. TERMINATION OF AGENCY CON’T
2. By operation of law
Performance of the contract
Expiry of the time
Death of either party
Insanity of either party
Insolvency of either party
Destruction of the subject matter
Principal becoming an alien enemy
Dissolution 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.