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Law of contracts –II

Kind of agents

Fathima Nadackal-521
List of contents.

 Acknowledgment
 Introduction.
 A flow chart
 Different kinds of agents
 Conclusion
 Bibliography

I, Fathima Nadackal thank everyone especially my faculty-in-charge Mr.Abhyachandran

for his immense support in completing the project. I would also like to thank my friends
in this regard.

On extent of their
“No word is more commonly used and constantly abused than the word Agent. A person may be spoken
of as an agent and no doubt in the popular sense of the word he may be properly be said to be an agent ,
although when it is attempted to suggest that he is an agent under such circumstances as create the legal
obligations attaching to agency that use of the word is only misleading.”

Lord Herschell, Kennedy v De Trafford


A person who is appointed by the principal or as an employment by an authority authorized by law to

make the employment .The word Agent even may include a servant.

In HALSBURY’S LAWS OF ENGLAND, “The description ‘agent’ is often employed in complimentary

and not in the legal sense.” The types of agent that are known to the business world are fewer.

Agents are classified in various ways according to the point of view adopted. From the viewpoint of the
authority they have, they can be classified as special agents, general agents and universal agents. They
are classified as mercantile or commercial agents and non-mercantile or non-commercial agents. There
are different various types of kind agents are as follows.
Kind of agent

Agents can be either special or general

Special Agents:

In the case Amrat lal C shah v Ram Kumar, Special agent was explained as an n agent who as the
authority to do only authority to do .A special agent is also known as a specific or particular agent. Such
agent appointed to perform a particular work or to represents his principal in particular transaction only

As soon as the said period lapses, the agency stands terminated. Specific agents have a limited authority
and as soon as the entrusted to him is performed, his authority also comes to an end. Especial agent
cannot bind his principal in any act other than for which he is specially appointed. If he doses anything
outside his authority, his principal cannot be bound by it. The third parties that deal with a special agent
must ascertain the extent of the authority he has.

General agents:

This type of agents has a general authority to do everything in the

course of his agency and he has to perform all the acts in the interest of his principal. Thus, general agent
is one that ahs authority to do all acts connected with the business of his principal. A manager of a
branch shop of a firm or a commission agent is instances of general agents. General agents have an
implied authority to bind his principal by doing various acts necessary for carrying
on the business of his principal. Sufficiently wide powers are vested in him to affect the business deals,
enter into trade bargains, to make purchases and also payments of the purchases, to receive money on
behalf of his principal.

Sub-agency denotes delegation of power by an agent to a person appointed by him

as sub-agent. Incidentally the agent himself is delegate of his principal. The principal is that ‘delegate
cannot delegate’. According to this, a person to whom powers have been delegate cannot delegate them
to another. Section 190 of the Act Contains this principle. Generally, an agent cannot lawfully employ
another to perform acts, which he has expressly. But, if by the ordinary custom of trade, a sub-agent may
be employed, the agent may to do so.

A sub-agent, according to section 191, is a person whom the original agent

employs in the business of the agency and who under the control of the original agent. Thus the relation
of the sub-agent to the original agent is, as between themselves, that principal.

We shall now discuss the Impact of the appointment of a sub-agent from the following two angles:-
In case of proper appointment:

The agent is responsible to the principal for the acts of the sub-agent. Thus, a commission agent for the
sale of goods who makes a proper employment of a sub-agent for selling his principal’s goods is liable to
the principal for the fraudulent disposition of the goods by sub-agent within the course of his

In the case of appointment without authority:

In term of Section 193, the principal is not bound by the acts of the sub-agent, nor is the sub-agent liable
to the principal. The agent is the principal of the sub-agent both to the principal and the third party.

Substituted Agent
: Substituted agents are different from sub-agents. Section 194 provides that substituted agents are not
sub-agents but are in fact agents of the principal. Suppose an agent has an implied authority to name
another person to act for the principal in the business of the agency, and he has named another person
accordingly. In the circumstances, such a named person is not a sub-agent he is an agent of the principal
for such part of the business of the agency as has been entrusted to him.
For Example: A directs B who is a solicitor to sell his estate by auction and to employ an
Auctioneer for the purpose. B names C, an auctioneer, to conduct the sale. In such a situation, C is
Not sub-agent, but is A’s agent for the sale.

Universal Agent:

A universal agent has a universal or an unlimited power to act on

behalf of his principal. A universal agent is one whose authority is unlimited and who any act on behalf
of his principal can do provide such act is legal and is agreeable to the law of land. Universal agent is
practically substituted for his principal for all those transactions wherein his principal cannot participate.

For Example: When a person leaves his country for a long time, he may appoint his son, wife or friend as
his universal agent to act on his behalf in his absence.


When a principal appoints two or more persons agents jointly or severally,

such agents are known as co-agents. Their authority is joint when nothing is mentioned about the
exercise of their authority. It implies that all co-agents concur in the exercise of their authority unless
their authority is fixed. But when their authority is several, any one of the co-agents can act without the
concurrence of other.


An auctioneers is a mercantile agent who is appointed to sell goods on

behalf of the principal i.e., seller and for this function, an auctioneer get a reward in the form of a
commission. An auctioneer conducts auction on behalf of a seller, as he is primarily the agent of the
seller. However, after the sale, he also becomes of the purchaser who gives the highest bid. An
auctioneer has no authority to self-the goods of his principal by private contract or contracts.

Besides the above mentioned agents, there are other types of agents also such as brokers, bankers,
clearing agents, forwarding agents, underwriter, estate agents, etc. They also play an important role and
perform various functions for and on behalf of their principals.

Classification on the basis of nature of work performed:

Mercantile Agents or Commercial:

Commercial agents are defined as an agent having in the customary court of business authority either to
sell, consign goods for the purpose of sale or the buy goods or to raise money.


Factor is an agent employed to sell goods or merchandise consigned or deliver to him by the principal.
He can also receive the price & give the goods discharge to the buyer. The word ‘factor’ means an agent
entrusted with the possession of goods for the purpose of selling them. This was clearly mentioned in the
case Parikh v King Emperor. In the case barring v Carrie, He is a mercantile agent whose ordinary
course of business is to dispose of which he is entrusted with the possession or control by the principal.


He is a mercantile agent who has been appointed to sell or buy goods on behalf & in name of principal.
He brings the contractual relation b/w the principal & a 3rd party. A “Broker” is also a kind of
mercantile agent. He is appointed to negotiate and make contracts for the sale or purchase of the property
on behalf of his principal, but not given the possession of goods
Commission Agents
Where the agent not only brings about the contract between his principal and the third party purchaser ,
and his responsibility in the deal continues till the delivery of the goods and the payment of the price
therefore , and the completion in the sense alone entitles him to demand and earn his commission , he
would be a commission agent1 .A commission agent is not an agent of all persons and firms for whom he
occasionally transacts business ; his agency is only with reference to specific sales and purchases made
under the directions of the principal. The legal relation between the merchant in one country and a
commission in another is that of principal and agent , and not seller and buyer , though this is consistent
with the agent and the principal , when the agent consigns the goods to the principal , being in relation
like that of seller and buyer for some purposes.

Del Credere Agent

A Del credere agent is another r type of mercantile agent. In ordinary cases the only function of n agent
is to effect contract between his principal and a third party .A decreed agent is one who in consideration
of extra remuneration , called a del credere commission , undertakes that persons with whom he enters
into contracts on the principal’s behalf will be in a position to perform their duties.2A del credere agent
incurs only a secondary authority to the principal .A del credere agent , who is already responsible to the
seller for the buyer , doesnot become responsible to the buyer for the seller’s performance.

Director of the company

The director of the company is not a servent but as much an agent as company cannot act in its own
person but only through its directos , who quo the company have a relationship of agent to the principal.

Bawarilal &co V. Sundaram Spinnig mill
Kalyani v. Tirkaram

This was a study which includes a brief description on the different kinds of agents.there would be more,
but this is not a wide study, but an ittempt to loolk into important of them .
This would include special agents, general agents, broker , factor, etc….