Chapter x (Secs.

182 to 238) of the Indian Contract Act, 1872

DEFINITION OF AGENT AND PRINCIPAL

AGENT

An AGENT is a person employed to do any act for another or to represent

another in dealings with third persons. The function of an agent is to bring

his principal Into contractual relations with third persons.

PRINCIPAL

A person for whom the above act is done or who is so represented is called .the PRINCIPAL

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ESSENTIALS OF RELATIONSHIP OF AGENCY

AGGREMENT B/W PRINCIPAL AND AGENT-:
Agency depends on agreement but not necessarily on contract. Any person can become an agent b/w a principal and the third person. INTENTION OF AN AGENT TO ACT ON BEHALF OF THE PRINCIPAL

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RULES OF AGENCY
There are two important rules of agency:

1.Whatever a person can do personally, he can do through an agent

2.He who does an act through another does it by himself .

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WHO CAN EMPLOY AN AGENT?

Acc. To sec 183 of ICA any person who is of age of majority according to law to which is a subject, and who is of sound mind may employ an agent.

WHO MAY BE AN AGENT?

Acc to sec 184 of ICA any person who is authorized to act such a person may be an agent. As the agent does not make contracts on his own behalf it is not necessary that he should have contractual capacity.

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DIFFERENCE B/W AGENT & SERVANT

An agent is employed to bring the principal into the legal relations with the third persons or to represent him in dealings with third persons. A servant does not ordinarily create legal relations b/w the third person and the employer.

An agent is bound to follow all the lawful instructions of the principal but he is not subject to the direct control and supervision of principal. A servant acts under the direct control and supervision of his employer and is bound to follow all the reasonable orders given to him in the course of his employment.

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Contnd...
An agent may work for several principals at the same time but servant usually serves only one master. A principal is liable for the wrongs of his agent done within the scope of his authority. A master is liable for the wrongs of the servants if they are committed in the course of his employment.

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CREATION OF AGENCY

1. By express agreement 2. By implied agreement Agency by ESTOPPLE. Agency by Holding out. Agency by necessity.

3. By ratification

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DUTIES OF AGENT
1. To carry out the work undertaken according to the directions given by the principal. To carry out the work with reasonable care, skill and diligence. To communicate with the principal in the case of difficulty. To pay sums received for the principal. To protect and preserve the interests of the principal in the case of his death or insolvency.

2. 3. 4. 5.

6.
7. 8.

Not to make secret profit from agency .

Not to set up an adverse title. Not to use information obtained in the course of the agency against the principal.
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RIGHTS OF AGENT Right of retainer. Right to receive remuneration. Right of lien. Right of indemnification. Right of compensation.

1.

2. 3. 4. 5.

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TERMINATION OF AGENCY

1. By act of the parties

Agreement

Revocation by the principal

Revocation by the agent

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TERMINATION OF AGENCY CONT 2. By operation of law

Performance of the contract Expiry of the time Death of either party Insanity of either party

Insolvency of either party

Destruction of the subject matter Principal becoming an alien enemy Dissolution of a company

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