Agency (Sections 182 to 238)
- Nature and kinds of agency
- Relations of principal with his agent
- Relations of principal with third parties
- Termination of agency
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Why agents?
Agent : The person who acts on behalf of some other persons
Principal : The person on whose behalf the agent acts
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Agency : The contract which creates the relationship of A & P
Definitions u/s 182
- Agent : “A person, employed to do any act for another, or represent another in dealing with third persons, is called agent.
- Principal: A person for whom such act is done or who is so represented, is called principal.
Definition seem to be very wide but...
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Emphasis on the powers of the agent to represent his principal in dealings with the third parties
Essentials and legal rules
- There should be an agreement between the principal and the agent :Agreement may be: Express or implied
- The agent must act in the representative capacity
- The principal must be competent to contract
- The agent need not be competent to contract. Why? But in the interest of the principal?
- The consideration is not necessary.
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Principles of agency
- Whatever a person can lawfully do himself may also do the same through an agent : subject to exceptions.
- He who acts through another is considered to have acted personally.
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Ways of creating agency (Kinds of agency)
- Agency by express agreement
- Agency by implied agreement
- Agency by operation of law
- Agency by ratification
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A. Agency by express agreement
Appointment in writing or by words of mouth
Usual form of a written agreement : Power of attorney - General power of attorney or Special PA
B. Agency by implied agreement
Due to the conduct of the parties or the course of between the parties or the situation of a particular case
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Agencies by an implied agreement includes:
- Agency by estoppel
- Agency by holding out
- Agency by necessity
- Husband and wife relations.
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Agency by holding out
More than estoppel - positive or affirmative conduct of principal is required
Agency by necessity
Due to extraordinary circumstances, person may be compelled to act without requiring the consent or authority
Conditions:
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- There must be real emergency to act on behalf of the P.
- Agent not in a position to obtain instructions
- Acting honestly and in the interest of the P
- Adopting reasonable and practicable course of action
Husband and wife relations
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For the purposes of buying household necessaries
Agency relationship may be discussed under:
a. Wife living with her husband
b. Wife living apart from her husband : on her own or without any fault on her side
c. Agency by operation of law
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e.g. The Partnership Act
D. Agency by ratification
A person does some acts on behalf of another without his knowledge or authority
Another person subsequently accepts the acts Then: by ratification
Also known as ex-post facto agency (agency arising after the event)
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Conditions for valid ratification
- The agent must act on behalf of the principal
- The principal must be competent to contract existence at the time of contract by the agent
- The principal must have the full knowledge of all material facts
- The ratification must be of the whole transaction
- The ratification should not cause any damage to third parties
- The ratification must be made within a reasonable time
- The acts to be ratified should be valid and lawful
- The act to be ratified must be existing at the time of ratification
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Termination of agency
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End of the relationship of a principal and his agent
Studied under:
- Termination of agency by act of the parties
- Termination of agency by operation of law
Termination of agency by act of the parties
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- Agreement between the principal and agent
- Revocation by the principal : Revocation may be express or implied – There are conditions
- Renunciation of agency by the agent
Termination of agency by operation of law
Termination of agency by operation of law
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- Completion of agency business
- Death or insanity of the principal or the agent : later insanity – company
- Insolvency of the principal
- Expiry of time
- Destruction of the subject-matter of the agency
- Subsequent event rendering the agency unlawful
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