1. LAW OF AGENCY

2. Meaning & Definition of Agency
Section 182,
“ An agent is a person employed to do any act for another or to represent another in dealing with third persons. The person for whom such act is done or who is so represented, is called the principal”

3. The person who delegates the authority is known as principal.
To whom the power is delegated is known as agent.
The relationship that is created is known as agency.

4. Features of the contract of agency
Principal is answerable to third parties for the acts of agent .
Principal must be competent to employ an agent – Only a person who is competent to contract can employ an agent. ( Major, Sound Mind )
Agent may not have contractual capacity –
A minor or a person of unsound mind may act as an agent & bind the principal to the third persons.

5. Test Of Agency
A person does not become an agent on behalf of another merely because he gives him advice in matters of business.
Every person who acts for another cannot be agent.

6. To test whether a person is or not an agent…
The essential condition is that whether he is clothed with a necessary authority by another ( principal ) to bind him & make him(principal ) answerable to the third persons & thus establishing a privity contract between that third person & the principal.

7. Classification of agents
Special Agents – who is employed to do some particular act or represent his principal in some particular transaction. As soon as the act is performed the authority of agent comes to an end. E.g. An agent engaged to sell a house.
Universal Agent – is one who is employed to all such act which a principal can lawfully do & can delegate. Agent has unlimited authority.

8. Duties of an agent
To follow principal’s directions – An agent must act within the scope of the authority conferred on him. An agent was instructed to insure goods. He failed to do so. The goods were destroyed. He was held liable to the extent of loss.
To follow the customs in the absence of instructions.
To conduct business with reasonable care skill & diligence.
To keep & render accounts to principal when demanded.

9. To communicate with principal.
Not to deal on his own account – If an agent wants to deal on his own account, he must seek the consent of the principal first & must acquaint him with all the material facts. ( Purchase )
Not to make secret profits ( Bribe )– Agency is a fudiciary relation.
To pay sum received – he can deduct his remuneration & all expenses incurred in conducting business.

10. Rights of an agent Right of retainer
Right of lien – he has right to exercise particular lien over the goods, paper, property until the amount due to him for commission, expenses has been paid.

11. Duties & Rights of the Principal
To pay remuneration to agent
To recover compensation for breach of duty by the agent
To forfeit agent’s remuneration where he is guilty of misconduct
To receive any extra profit made by agent.
To enforce the various duties of the agent.
To receive all sums.

12. Termination of Agency By act of parties: By agreement – mutual consent
By revocation of authority by the principal – The principal can revoke the authority of an agent at any time before the authority has been exercised as to bind the principal.
By renunciation by the agent – by giving reasonable notice.

13. Termination by operation of law:
By death of principal or agent.
By expiry of time – where agency is for fixed time period.
By insolvency of the principal.
By destruction of subject matter – agency was created to sell a house & house destroys.
By becoming alien enemy – where principal & agent are from different countries.

14. THANK YOU