Contract of Agency PPT MBA

7/31/2019 Contract of Agency PPT MBA

1/15

AgencyA person who has capacity to contract mayenter into a contract with another

1) Either by himself

2)Through another person


2/15

An Agent is a person employed to do anyact for another or represent another in isdealings with third person

The function of an agent is to bring hisprincipal into connectional relations withthird parties. The agent is merely aconnecting link between the principal andthird parties .


3/15

Essentials relationship of Agency

1) Agreement between the principal and theagent

2) Intention of agent to act on behalf of the

principal


4/15

Kinds of Agents

A) 1)Special Agent2)General Agent

3)Universal Agent

B) Mercantile Agent1) Factor

2) Auctioneer

3) Broker4)Commission Agent


5/15

Duties of an Agent

1) To Carry out the work under takenaccording to the direction given by theprincipal

2) To carry out work with reasonable careand diligence

3) To render accounts to the principal

4) To communicate with the principal in caseof difficulty


6/15

5) Not to deal on is on account:if A acts without the knowledge of P

a) P may repudiate the contract

b) Claim benefit6) To Pay sum received for the P

7) To protect and preserve the interests of

the P in case of his death or insolvency


7/15

8)Not to use information obtained in thecourse of agency against the P

9)Not to make secret profit from agency

10) Not to set up an adverse title conversion11) Not to put himself in a position where

interest and duty conflict


8/15

Rights of an Agent

1) Rights of a retainer2) Rights of receive remuneration

3) Rights of lien

4) Rights of indemnification5) Rights of compensation

6) Rights to stoppage in transit


9/15

Duties of Principal

1) To indemnify the agent against theconsequences of at lawful acts

2) To indemnify the agent against the

consequences of its done in good faith3) To indemnify agent for injury caused by

principals neglect

4) To pay the agent the commission is otherremuneration agreed.


10/15

Rights of the Principal

1)To recover damages2)To obtain an account of secret profits

recover them and resist a claim of

remuneration3) To resist agents claim for indemnity


11/15

Creation of Agency

A) Agency by Express AgreementB) Agency by Implied Agreement

1) inferred by circumstance

2) Things spoken / written


12/15

Implied agency includesa) Agency by estoppel

b) Agency by holding out( positive or affirmativeact)

c) Agency by Necessity

i) Agent may exceed his authority

ii) A person entrusted with anothers property

iii) Husband and Wife


13/15

C) Agency by Ratification

Requisites of valid ratification :-

1) The A must purport to act as agent for aprincipal who is in contemplation

2) The P must be in existence at the time of

contract (Kelner * Bayter)


14/15

3)The P must have contractual capacity bothat the time of contract and at the time ofratification

4) Ratification must be with full knowledge of

facts5) Ratification must be done within a

reasonable time

6) The act to be ratified must be lawful andnot void or illegal


15/15

7) The whole transaction must be ratified8) Ratification must be communicated

9)Ratification can be of the acts which the P

have power the to do .10) Ratification should not put third party to

damage

11) Ratification relates back to the date of theact of the A

Documents

Contract of Agency PPT MBA