Law of Agency

Essentials of Agency 1. Agreement between principal and agent 2. Intention to act on behalf

Creation of Agency Agency by express agreement By implied agreement By estoppel By holding out By necessity Entrusted with other’s property 3. By ratification Requisites of valid ratification

Creation of Agency Agent must be willing Principal must be in existence Principal must have contractual capacity With full knowledge of facts Within reasonable time Must be lawful Must be for total transaction

Creation of Agency h. Must be communicated Dates back to act of the agent 4. By operation of law – Partnership, Company

Classification of Agents Special agent General agent Universal agent Banker Non-mercantile agents

Duties of Agent Work according to the directions of the principal Reasonable care Render proper accounts to his principal Communicate to principal in case of difficulty Not to deal on his own account To pay sums received for the principal Preserve the interest of principal

Duties of Agent 8. Not to use information against the principal 9. Not to make secret profits 10. Not to set adverse title 11. Not to put himself in a position where interest and duty conflict 12. Not to delegate authority

Rights of Agent Right to retain Right to receive remuneration Right of indemnification Right of compensation Right of stoppage of goods in transit

Rights of Principal To recover damages To obtain an account of secret profits To resist claim

Duties of Principal To indemnify the agent To indemnify for injury caused by principal neglect To pay remuneration

Termination of Agency By act of the parties Agreement Revocation by the principal Revocation by the agent

Termination of Agency Contd 2. By Operation of law Performance of contract Expiry of time By death or insanity Insolvency Destruction of subject matter Becoming an alien enemy Dissolution of a company