INTRODUTION
DEFINITION OF AGENT
& PRINCIPAL
·
An agent is a
person employed to do any act for another or to represent another in dealings
with third persons.
·
The person for
whom such acts are done or who is represented is called the principal.
·
The contract
which creates relationship of principal & agent is called an agency.
ESSENTIALS AND LEGAL
RULES
1. There should be an
agreement between the principal and the agent: Agreement may be: Express or
implied.
2. The agent must act
in the representative capacity.
3. The principal must
be competent to contract.
4. The agent need not
be competent to contract. But Agent can make contract in the interest of the
principal.
5. The consideration is
not necessary.
GENERAL RULES OF AGENCY
1. Whatever a person
can lawfully do himself, he may also do the same through an agent
2. He who acts through another
does by himself Distinction b/w agent & servant.
WHO MAY EMPLOY AN
AGENT?
·
Any person who
is of the age of majority according to the law to which he is subject, and who
is of sound mind, may employ an agent.
·
As between the
principal and third persons any person may become an agent.
KINDS OF AGENTS
I. From the point of
view of the extent of their authority:
1. General
Agent- Is one employed to do
all the acts connected with a particular business or employment Eg: manager of
a firm.
2.
Special Agent – employed to do some
particular act or represent his principal in some particular transaction. Eg:
agent employed to sell a motor car.
3. Universal Agent – Whose authority is unlimited? He enjoys extensive
powers to transact every kind of business on behalf of principal.
II. From the point of
view of the nature of work performed by them:
·
Mercantile agent
An agent dealing in the buying and selling of the goods An agent who has the
authority either to sell the goods, or to consign the goods for the purpose of
sale, or to buy the goods or to raise the money on the security of the goods on
behalf of his principal.
Types
of Mercantile Agents
Factor: possession of the goods is given for the purpose of
selling the same – sells in his own name.
Broker: appointed to negotiate and make contracts for the
sale and purchase on behalf of the principal – not given possession – not in
his own name
Commission agent: buys and sells and receives commission.
III. Non- mercantile agents: Does not usually deal in the buying or selling of
the goods. They include Insurance agents, Counsels or advocates, wife, etc.
DUTIES
OF AN AGENT
1. Duty to follow the instructions of the
principal – if not.
2.
Duty to carry out the work with care and skill
3.
Duty to render accounts to the principal
4.
Duty to communicate with principal – if no time
5.
Duty not to deal on his own account
6.
Duty not to make secret profits from agency
7.
Duty to pay the amount received for the principal
8.
Duty not to use the information, received in the course of agency, against the
principal
9.
Duty to protect the interest of the principal in case of his death or insanity
10.
Duty not to delegate authority.
RIGHTS
OF AN AGENT
1.
Rights to retain money due from the principal
2.
Right to receive remuneration
3.
Right of lien – The agent has the right to retain goods, papers and other
property- only particular lien
4.
Right to be indemnified against consequences of lawful acts.
5.
Right to compensation
6.
Right to be indemnified against consequences of acts done in good faith
7.
Right of stoppage of goods in transit.
(a) Principal becomes insolvent
(b)
Agent has bought goods out of his own money
RIGHTS
OF PRINCIPAL
·
Recover damages
from agent if he disregards directions of Principal
·
Obtain accounts
from Agent
·
Recover moneys
collected by Agent on behalf of Principal
·
Obtain details
of secret profit made by agent and recover it from him
·
Forfeit
remuneration of Agent if he misconducts the business
DUTIES
OF PRINCIPAL
·
Pay remuneration
to agent as agreed
·
Indemnify agent
for lawful acts done by him as agent
·
Indemnify Agent
for all acts done by him in good faith
·
Indemnify agent
if he suffers loss due to neglect or lack of skill of Principal.
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