Introduction:
The two terms-‘agent’ and ‘principal’ – have been defined in Section 182 of the contract act as follows:-
Agent is an individual utilized to do any represent another or to speak to another in dealings with third people. The individual for whom such act is done, or who is spoken to, is known as the principal. The contract which makes the relationship of ‘head’ and ‘agent’ is called an ‘agency’.
“He who does through another, does without anyone else.”
Whatever an individual equipped to an agreement may do without anyone else, he may do through an operator, aside from acts including individual expertise and capabilities. Truth be told, where the work to be done is clearly close to home, no specialist can be utilized. For instance, an individual can’t wed through a specialist, can’t paint an image through an operator, etc.
Section 226 gives to a similar impact: “contracts went into through an operator, and commitments emerging from acts done by an agent, might be implemented in a similar way and will have similar lawful outcomes as though the contract had been gone into and the demonstrations done by the head face to face.”
Who is an Agent?
An agent is an individual utilized to do any represent another or to speak to another in dealings with third people.[1] The individual for whom such act is done, or who is so spoken to, is known as a ‘principal’. [2]
The Indian Contract Act of 1872 doesn’t make any qualification between various classes of operators. On one hand, an operator might be selected by the principal, it likewise incorporates work by any power approved by law to make the business. [3]
Agents are recognized in regard to power as broad or extraordinary agents. The previous articulation incorporates representatives, variables, accomplices, and all people utilized ina business of filling a place of a by and large perceived character, the degree of authority being clear from the idea of work or position; the last denotes an agent selected for a specific event or reason, restricted by the work.[4] A special agent has just power to do some specific represent some extraordinary [5]occasionor reason which isn’t inside the standard course of his business or calling. This distinction is made to decide the authority of that agent. It has been expressed.
“An overall agent has the full clear authority because of his work or position and the chief will be limited by his demonstrations inside that power however he may have forced unique prohibitive cutoff points which are not known to the next contracting party. A special agent has no clear authority past the constraints of his appointment and the chief isn’t limited by his demonstrations in an overabundance of those limits whether the other contracting party is aware of them or not.”
Who may Employ an Agent?
As per section 183, “any individual who is of the period of lion’s share as per the law to which he is subject, and who is of the sound psyche, may utilize an agent.” As such any individual capable of an agreement may utilize an operator and a minor, a neurotic or an inebriated individual can’t utilize an operator. Per section 184 “as between the head and third people any individual may turn into a special.” Thus even a minor or an individual of the shaky psyche can be named as the operator. It is so in light of the fact that the demonstration of the operator [6]the demonstration of the head and consequently the chief is at risk to outsiders for the demonstrations of the minor agent. Obviously, in designating a minor or an individual of the weak psyche as an agent, the chief runs an incredible danger since he can’t hold such an operator obligated for [7]his wrongdoing or carelessness.
No Consideration is Necessary
“no thought is important to make an agency.”
Section 184-the way that [8]the chief has consented to be spoken to by the agent is an adequate inconvenience to the chief to help the agreement of organization, for example, to help the guarantee by the agent to act in that limit.
It is to be noted, notwithstanding, that an unnecessary operator will undoubtedly accomplish the work depended to him by his head. In any case, when he[9] starts the work, he will undoubtedly finish it. Generally, an agent is paid compensation for his administration.
Kinds of Agents
- General agents:- a general agent is one who is utilized to do all demonstrations associated with a specific business or work, for example, a chief of a firm.
- Special agents:- a special agent is one who is utilized to do some specific demonstration or speak to his head in some specific exchange, for example, an operator utilized to sell an engine vehicle. When the demonstration is played out, the authority of such an operator reaches a conclusion.
- Universal agent:- his position is boundless for example one who is approved to do all the demonstrations which the chief can legally do and can assign. He appreciates broad forces to execute each sort of business for the benefit of his head. [10]
Sub-Agent and Consequences of Appointment of Sub-Agent
“A sub-agent is an individual utilized by, and acting heavily influenced by, the sub-agent occupied with the office.” Thus an individual utilized by an operator is known as a sub-agent. A sub-agent acts heavily influenced by the sub-agent with respect to the connection in the middle of themselves is that of agent and principal. At the end of the day, the sub-operator [11]goes about as principal for the sub-agent.
Results of the arrangement of sub-agent. The lawful impacts of the arrangement of a sub-agent as between the head and the sub-agent entomb se and as respects outsiders rely on whether the sub-agent has been appropriately or inappropriately named.
Where a sub-agent is appropriately selected. In such a case, according to Section 192, the accompanying results rise:
- The principal is bound and subject to outsiders for the demonstrations of the sub-agent, as though he were an operator initially selected by the principal.
- The agent is mindful to the head for the demonstrations of the sub-agent. For instance, if any funds are expected on the sub-agent, the agent is liable for the equivalent and the chief can’t sue the sub-agent on that account. It is so on the grounds that in the eye of the law there is no privity of agreement between the head [12] and the sub-agent and thusly, by and large, the chief can’t guarantee against the sub-agent for carelessness.
- The sub-agent is answerable for his demonstrations to the agent and not to the principal. In any case[13], in the event that the sub-agent is liable of extortion or unyielding incorrectly, he is legitimately subject[14] to the principal. In such a case the chief has the decision to sue either the agent or the sub-agent. [15]
Duties of Agent
- Duty to follow the principal’s headings or customs (Section 211) [16]
- Duty to do the work with sensible aptitude and ingenuity (Section 212) [17]
- Duty to deliver accounts (Section 213) [18]
- Duty to impart (Section 214) [19]
- Duty not to bargain for his own (Section 215-216)
- Duty not to make any benefit out of his office aside from his compensation (Section 217-218)
- Duty on the end of office by principal’s demise or craziness (Section – 209)
- Duty not to appoint authority (Section 190)
Agent’s Authority
It has been found on account of Palestar Electronics Private Limited v. Extra Commissioner that the demonstrations of the operator inside the extent of his authority bind the principal. The contract went into through an agent, and commitments arising from acts done by the agent might be authorized in a similar way and will have the same lawful outcomes, as though the contracts had been gone into and the demonstrations done by the principal face to face. It is fundamental for this impact to follow that the operator must have done the demonstration inside the extent of his position. The authority of an agent and more especially its degree is subjected to some controversy.
The vulnerability is generally because of the way that the authority of an agent does not depend upon one source. It has been appropriately held on account of Ramlesh v. JasbirSingh that organization appeared to elevate and not to ruin the business. The authority of a specialist implies his ability to tie the principal. It alludes to”the whole of the demonstrations it has concurred among principal and agent that the agent should do for the benefit of the principal.” When the operator does any such demonstrations, it is said he has acted inside his position as was found on account of NandLalThanvi v. LR ofGoswamiBrijBhushan. [20]
Concerning contracts and acts which are not really approved, the chief perhaps limited by them, on the standard of estoppels, in the event that they are inside the extent of the agent’s apparent power, yet for no situation is he limited by any unapproved demonstration or transaction as for people having noticed that the real authority is being exceeded. [21]
Extent of Agent’s Authority
- Actual authority:- an agent can do all such goes about as has been allocated to him either explicitly or impliedly and accordingly tie the principal to outsiders by the demonstrations done inside the extent of his real or genuine power[22]. The authority is supposed to be communicated when it is given by words verbally expressed or composed. The authority is supposed to be suggested when it is derived from the conditions of the case or the normal course of dealings. [23]
- Ostensible or obvious authority:- an agent can likewise tie the principal to outsiders by acts done inside his evident power. In this manner ‘actual’ and ‘obvious’ authority remains on a similar balance, apparent position implies a power which the outsiders managing agent can attempt to be with the specialist corresponding to a specific business commonly. [24]
- Authority in emergency:- anything in emergency to spare principal.
Section 194- Substituted Agent
In like manner, “when an agent has an express or inferred authority of his principal to name someone else to represent the principal and the agent names someone else appropriately, such individual isn’t a sub-agent yet a subbed agent of the principal in regard of the business which is depended to him.” Thus an agent basically names or selects a subbed agent in line with the principal and thereafter.
Delegation of Authority
Section 190 provides that “an agent cannot lawfully employ another to perform acts which he has expressly or impliedly undertaken to perform [25]personally, unless by the ordinary custom of trade a subagent may, or from the nature of agency, a subagent must be employed. “Accordingly an agent cannot delegate his powers or duties to another without the express authority of the principal, except in certain cases.
This section is [26]based on the well-known maxim of Roman law, viz, “delegates non potest delegare”, that is “a delegate cannot further delegate.” An agent, being himself the delegate of his principal[27], cannot pass on that delegated authority to someone else. As a rule, he must not depute another person [28]to do that which he has undertaken to do personally. The reason for this rule is that confidence in the integrity and competence of a particular person is at the root of a contract of agency.
Creation of Agency
- Agency by express understanding:- by overhearing people’s conversations or by arrangement recorded as a hard copy. Be that as it may, in specific cases, for example, execute a deed available to be purchased or acquisition of land, the agent must be designated by executing a formal ‘intensity of lawyer’ on a stepped paper. [29]
- Agency by suggested understanding:- inferred organization emerges when there is no express arrangement delegating an individual as an agent[30], yet rather the presence of agency is deduced from the conditions of the case, or from the direct of gatherings on a specific event or from the connection between parties. Such an agency may take the accompanying structures. [31]
a. Agency by estoppels
b. Agency by waiting
c. Agency by need
Agency by endorsement:- approval implies the ensuing selection and acknowledgement of a demonstration initially managed without directions or authority. [32]Accordingly, where a chief asserts or receives the unapproved demonstration of his agent, he is said to have endorsed that demonstration and there appears an organization by approval reflectively. Section 196, manages the impact of confirmation. It gives that “where demonstrations are finished by one individual for the benefit of another, however without his insight or authority, he may choose to approve or to repudiate such acts.
On the [33]off chance that he sanctions them, similar impacts will follow as though they had been performed by power.” [34]By approving the unapproved demonstration of the agent, the principal gets limited by the goes about as though had been initially done by the position. Accordingly, confirmation adds up to earlier authority. This implies that the agency appears from the second the agent acted and not from when the principal approved. [35]
Termination of Agency
An office might be ended an any of the accompanying ways: [36]
- By demonstration of the gatherings [37]
- Agreement
- Revocation by the principal[38]
- Renunciation by the agent[39]
- By activity of law
- Completion of business of the office
- Expiry of time
- Death of the principal or the agent
- Insanity of the principal or the agent[40]
- Insolvency of the principal
- Destruction of the topic
- Dissolution of the organization
- Principal and agent becomes outsider adversary.
Conclusion
Throughout the long term, it has been seen that an agent assumes a few parts in an agreement. He needs to venture into the shoes of the principal, yet is prohibited from obligation for his activities by and large. Thus, the restrictions of his position have been an issue of discussion and considering for quite a few years since the development of the Agent-Principal relationship thought. A few adjudicators throughout a range of time, in different cases that have been canvassed in the examination paper have communicated shifting suppositions and perspectives with respect to the authority of an agent. In lieu of disentangling the assignment of choosing this position, a few classes of specialists were additionally recognized. The duties and fundamental forces of these agents contrast, contingent upon the work they do.
An agent is frequently observed as an individual who ventures into the shoes of his principal and does all undertakings like the principal would do in comparative conditions, with his most extreme perseverance and cautiousness. An overall principle that has been advanced to check agents obligation is his essence or absence of sensible consideration and thoughtfulness regarding the current work. His power, whenever surpassed, can be tested by the principal in a courtroom; nonetheless, the outsider which has gone into the agreement being referred to will have a coupling directly on it. Generally speaking, after this broad investigation of the detailed and complex nature of the Agent’s agreement we can see that courts, particularly in legal translation don’t try to reimburse the agent against the misfortunes caused because of his slip-ups, but instead look to repay the outsider from the equivalent. Simultaneously, the principal keeps up the option to sue the agent and request pay on the off chance that the agent has surpassed his power without an entirely sensible and basic purpose behind the equivalent.
References:
[1]Singh, Avtar Law of Contract and Specific Relief Page 796 (tenth edition)
[2]Singh, Avtar Law of Contract and specific Relief Page 794 (tenth edition)
[3]Payne v. Leconfield (1882) 5I LJ QB 642.
[4]Ibid, 2
[5]Section 211 of the Indian Contract Act, 1872
[6]Section 213 of the Indian Contract Act, 1872
[7]Singh, Avtar Law of Contract and Specific Relief Page 745
[8]Section 212 of the Indian Contract Act, 1872
[9]Section 214 of the Indian Contract Act, 1872
[10] Section 215 of the Indian Contract Act, 1872
[11]Section 220 of the Indian Contract Act, 1872
[12]Section 222 of the Indian Contract Act, 1872
[13]Priyanshu Gupta, Hidayatullah National Law University, Raipur.
[14]Section 182 of the Indian Contract Act, 1872.
[15]Indian Contract Act, Bare act
[16]KalyanjiKuwarji v. TirkaramSheolal AIR 1938
[17]Sukumari Gupta v. DhirendraNath Roy Chowdhury AIR 1941 Cal 643.
[18]Leake, Page 323, 6th Edition
[19]AIR 1938 Cal 423.
[20]Amrit Lal C Shah v. Ram Kumar AIR 1962 Punj 325.
[21]Jacob v. Morris [1902] 1 Ch816
[22]Section 189 of the Indian Contract Act, 1872.
[23]Exall v. Partridge (1799) 8 T.R. 208.
[24]Sachs v. Miklos [1984] 2K.B. 23.
[25]AIR 1950 SC 15.
[26]Section 227 of the Indian Contract Act, 1872
[27]Page 307 (7th Edition)
[28]Section 228 of the Indian Contract Act, 1872
[29]Sarshar Ali v. Robrts Cotton Association (1963) I SC 244 (Pak.)
[30]Drinkwater v. Goodwin (1775) Cowp 251
[31]AIR 1945 Nag 121.
[32]Emerson v. Heclis (1809) 11 RR 520
[33]Singh, Avtar Law of Contract and Specific Relief Page 789 (Tenth Edition)
[34]Sarshar Ali v. Roberts Cotton Association (1963) ISC 244
[35][1893] 1 Q.B. 346.
[36](2004) 2 MPLJ 529
[37]Boorman v. Brown (1843) 3 QB 511
[38]AIR 1964 Ker 176.
[39]Attorney General for Ceylon v. Silva [1953] A.C. 461
[40]Mulla, DinshahFardunjiMulla The Indian Contract Act Page 344 (13th Edition 2011)
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