Indian Contract Act, which defines the term 'agency', but agency is implicit under principal). The relationship has its origin in contract^. 1. Syed Abdul Khader v. Rami Reddi Sections 13,14, The Indian Contract Act, 8. Section 23, The . Inherent in the Principal-Agent (P-A) relationship is the understanding that the agent As per sections to of the Indian contract act , an agency may. The Indian Contract Act,. CA. Manish Dafria. Chapter 1. Unit 9. Agency. Contracts relationship of principal and agent has been created, he would be.
WhatsApp Who is an Agent? A person who has attained the age of Majority. A person who is of sound mind. A person meeting with these two criteria is legally allowed to employ an agent. Any person can become an agent who has: A sound mind so that he is responsible to the Principal. The authority exercised by the agent can either be expressed or implied.
A owns a shop in Kolkata but resides in Delhi. A has hired B to manage the shop. Any action of his must not be illegal during discharge of his duties. A has employed B in his shop. A asks B to buy some things for the shop. B should use only legal means to obtain those things. B cannot steal or do something which is illegal. In an emergency an Agent would act as a prudent man and react in the way as he would have done if he himself would have been in the same situation.
A has employed B in his vegetable shop which is in Delhi. A asks B to take the vegetables to Kolkata to sell them. On his way to Kolkata, B finds that the vegetable may rot after two days. B has the authority to sell them in Lucknow to protect the interest of profits to be earned by A. The dealer of a particular make of cars, e. Mercedes, may be called as an agent, but the dealer in law is not an agent for the manufacturer.
No privity of contract exists between the manufacturer and the buyer. This example highlights the difference between agency and dealership. But, a dealer buys the product of a company directly from its manufacturer on its own name. An agent acts as an intermediary and receives a commission for its services.
But, a dealer acts on behalf of the firm rather than acting as an intermediary. As mentioned in the above car example, no contract exists between the dealer and the manufacturer, thus, there is no legal relationship, which is the most important thing in the law of agency.
The description of an agent looks quite similar to that of a servant or a bailee but their duties, role and liabilities are entirely different. Agent Servant An agent is authorized to act on behalf of his principal and create contractual obligations between the principal and a third party.
A servant does not have the authority to create contractual obligations between the principal and a third party.
Agency under Contracts - Academike
The principal has the authority to direct the agent as to what he has to do but he cannot direct how it is to be done. The master can direct a servant as to what has to be done and also how it should be done An agent is paid in terms of commission A servant gets his salary or wages.
An agent can work for different principals at the same time A servant usually works under one master at a given point of time. The agent offers and accepts new proposals from the third party on behalf of his principal and thus new legal relations are created in law of agency. A servant cannot create any such legal relations Section of the Indian Contract Act, defines sub-agent.
Thus there are two types of delegation— Proper delegation— This comes under section of the Indian Contract Act, This is when an agent having the authority to do so, appoints a sub-agent. Improper delegation— This comes under section of the Indian Contract Act, This is when an agent without any authority appoints a sub-agent.
The table shows a distinction between an agent and a sub-agent: Agent Sub-agent An agent is appointed by a principal and is under his control. A sub-agent is appointed by an agent and as such is under the control of the agent.
Agency under Contracts
An agent acts under the principal. A sub-agent acts under an agent. A privity of contract exists between a principal and an agent. No privity of contract exists between a principal and a sub-agent. An agent can ask for remuneration from the principal.
A sub-agent cannot ask for remuneration from the principal. Sections and talk about substituted agents. When an agent having the authority to do so, names another person to act for the principal in the business of the agency, then such a person is called a substituted agent and not a sub-agent.
Thus a contractual relation comes in existence between the principal and the substitute agent and therefore the substituted agent is directly liable to the principal to perform his duties. The distinction between a sub-agent and a substituted agent is important because an agent is liable in relation to the acts of a sub-agent, but an agent carries no liability to the principal for the acts of the substituted agent.
Agent - Sections - of Indian Contract Act - Law Times Journal
The table shows a distinction between a sub-agent and a substituted agent: Sub-agent Substituted agent An agent appoints a sub-agent and therefore a sub-agent is under the control of an agent.
A substituted agent is only named by the agent but is under the control of the principal. A sub-agent acts under the agent. A substituted agent acts independently for his principal. A sub-agent cannot be held liable by the principal, except in case of fraud. A substituted agent can be held liable by his principal.