APPOINTMENTThe provisions relating to Agency are contained

in sections 182 – 238 of the Indian contract act 1872.

According to sec 182, an ‘agent’ is a person employed to do any act for another or represent another in dealings with third persons.

The person for whom such an act is done or who is so represented is called the principal.

Any person who is a major and who is of sound mind may employ an agent.

“qui facit per alium facit per se”.Whatever a person can do personally,

he can do through an agent.Any person may become an agent,

but minors and persons of unsound mind cannot be held responsible to their principal.

No consideration is necessary for agency.

The authority of an agent maybe express or implied.

AGENT AND SERVANTAn agent is vested with authority to create

contractual relationship between the principal and a third party. A servant does not ordinarily create such relationship.

Agent follows instructions but not subject to direct control and supervision, whereas a servant works under direct control.

An agent may work for several principals at the same time but the servant usually not.

CREATION OF AGENCYAgency by express agreement.Agency by implied agreement.Agency by estoppel Agency by holding out.Agency by necessity.Agency by ratification.Agency by operation of law.

REQUISITES OF VALID RATIFICATIONAgent must purport to act as agent.The principal must be in existence at the

time of contract.The principal must be competent to

contract both at the time of contract and ratification.

Ratification must be with full knowledge of facts and within a reasonable time of the act

The act ratified must be lawful not void or illegal.

Ratification should be of the whole transaction and communicated.

Ratification can be of the acts which the principal had the power to do.

Ratification should not put a third party to damages.

Ratification relates back to the date of the act.

CLASSIFICATION OF AGENTS Classification as to extend of authority.

Special agent. General agent. Universal agent. Classification as to nature of work. Factor. Auctioneer Broker. Commission agent. Del credere agent.

DUTIES OF AGENTTo carry out the work according to the

directions of the principal.To carry out the work with reasonable

care, skill and diligence.To render proper accounts to the

principal.To communicate with the principle in

case of difficulty.Not to deal on his own account.To pay sums received for the principal.

To protect and preserve the interests of the principal in case of his death or insolvency.

Not to use information obtained against the principal.

Not to make secret profit from agency.Not to set up an adverse title.Not to put himself in a position of

conflict of interest.Not to delegate authority.

RIGHTS OF AGENTRight of retainer.Right to receive remuneration.Right of lien.Right of indemnification.Right of compensation.Right of stoppage in transit.

RIGHTS AND DUTIES OF PRINCIPALRIGHTS:-To recover damages.To obtain an account of secret profits.To resist agents claim for indemnity.DUTIES:-To indemnify the agent against

consequences of all lawful acts, done in good faith and injury caused by principals neglect.

AGENTS AUTHORITY

Actual or real authority.Ostensible authority.Authority in an emergency.

POSITION OF PRINCIPAL AND AGENT IN RELATION TO THIRD PARTIESNamed Principal:-Acts of agent or the acts of principal.When the agent exceeds his authority.Notice given to agent as notice to

principal.Misrepresentation or fraud.

Unnamed Principal.

Undisclosed Principal.

PERSONAL LIABILITY OF AGENT

When contract expressly provides.When the agent acts for a foreign

principal. When he acts for undisclosed principal.When he acts for a principal who cannot

be sued.Where he signs a contract in his own

name.

Where he acts for a principal not in existence.

Where he is liable for breech of warranty of authority.

Where he receives or pays money by mistake or fraud.

Where his authority is coupled with interest.

Where the trade usage or custom makes him personally liable.

TERMINATION OF AGENCY [Sec 201]. By act of parties.Agreement. Revocation by the principal or agent.By operation of law.Completion of performance.Expiry of time.Death, insanity or insolvency.Destruction of subject matter.Principal becoming alien enemyDissolution of a company.

IRREVOCABLE AGENCY

Where the agency is coupled with interest.

Where the agent has incurred a personal liability.

Where the agent has partly exercised the authority.