Business Law, Chap 13
Uploaded by moughera on Mar 23, 2009
INDIAN CONTRACT ACT 1872
Moughera Waqas
Agency
A (name of) relationship between the principal and the agent, i.e. the ‘contract of agency’
Agency (sec. 182)
An agent is a person employed to do any act for another or to represent another in dealings with third person
Parties
i. Agent (person employed to do any act on behalf of another, or to represent employer)
ii. Principal (for whom the act is done and who is represented by the agent)
Types of agency
i. General (authorization to do any at concerning a particular business/trade)
ii. Special (authorization to do any specific act concerning the business/trade or any specific contract)
Essentials
i. Agreement (sec. 184, express or implied)
ii. Legal relation (must create legal relation, except the domestic and social agreements)
iii. Competent to contract (sec. 185, principal must be major, sound mind rather that the agent may or may not be a minor, unsound mind creating the liability on the principal)
iv. Consideration (sec. 185, consideration is not a necessity)
v. Intent (agent must be intent to act on behalf of the principle)
Types of Agents
i. General (is appointed to do all the transactions concerning the business)
ii. Special (has a limited authority within a specific business/trade)
iii. Universal (all the legal powers are transferred to the agent from the principal, to do business on his behalf)
iv. Broker (buys and sells goods without taking their possession, receives brokerage)
v. Commission agent (purchases the goods in foreign market as well as domestic market on a prefixed rate of commission)
vi. Del credere agent (gives the surety to the principal for the third party in case of a credit transaction)
vii. Auctioneer (sells goods at public auction, receives the possession of the goods, has the right of lien)
viii. Banker (sale and purchase of the securities, collection of cheques, bills of exchange and dividend etc)
ix. Co-agent (appointment of two or more agents for the same principal)
x. Sub-agent (employed and acting under the original agent, liable to the agent not the principal except of fraud)
xi. Substituted (the appointed agent in the place of original agent)
xii. Indenter (purchases and sells on behalf of principal from foreign country)
xiii. Mercantile agent (can buy and sell sureties to raise money, pledge the goods, documents, authorised by the principal)
Creation/Confirmation of Agency
i. By express agreement (sec. 186, through word spoken or written)
ii. By implied agreement (according to the circumstances and according to the act done by the parties)
a. through estoppel (sec. 237, stopping the principal from denying the fact of the agency)
b. through holding out (act done on the basis of prior but expired information of agency)
c. through necessity (emergencies, safety of principal, husband and wife)
iii. Through the ratification (sec. 196, if...