Business law
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A contract of agency is an agreement where one person, the agent, acts on behalf of another person, the principal. The agent is authorized to negotiate and make contracts with third parties under the control of the principal. Key aspects of a contract of agency include that consideration is not essential, the agent can delegate authority with permission, and if the agent is removed, any sub-agents are automatically terminated. Authority can be express, implied, by estoppel, or by holding out based on the relationship between the parties. An agent's rights against the principal include the right to remuneration, lien over the principal's goods until paid, and indemnity if removed without cause.
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Business law
- 1. Topic : Contract of agency
- 2. Agency is an agreement by which a relation based upon an expressed or implied. There is one person the agent, who is authorized to act under the control of and for another, principal in negotiating and making contract with third person. According to Indian Contract Act, 1872 “Contract of agency is a contract by which a person employs another person to do any act for himself or to represent him dealing with third person”
- 3. 1. No essential of consideration 2. Delegation of Authority 3. Contractual capacity 4.Agent can appoint sub agent with permission of Principal 5. If the agent has removed, subagent is automatically terminated
- 4. • As between the principal and the third person any person can become an agent. • Any person who is of the age of majority according to the law of which he is subject, and who is of sound mind, may employ an agent.
- 5. 1.By Express Agreement Normally the authority given by principal to his agent is an express authority in such case; the agent may be appointed either by the words spoken or written or conduct of activities. For e.g. power of attorney.
- 6. • Implied agreements are unexpressed agreement. Implied agreements/agency arises from the conduct, situation or relationship of the parties. It may be inferred from circumstances of the case; and things spoken or written or the ordinary course of dealing may be accounted as circumstance of the case. Implies agency may come from different cases.
- 7. • If a person represents by words or conducts that another person is his agent and third party reasonably believes on such representation and enters into an agreement, the person who represents so is bound by the act of other this is known as the agency by estoppel. In this case of agency by estoppel, the third party must act in good faith and must rely on a representation of the agents authority to act as an agent.
- 8. • This may arise from the relation of employer and employee. A manager is an agent of the company. The agency that is held due to any kind of business relationship is known as agency by holding out
- 9. There are number of rights which an agent has against his principal and third parties. These are as follows:- 1. Right to get remuneration If it is provided in the contract of agent has right to receive reasonably remuneration for his work for principal. •
- 10. 2. Right of Lien • If agent is not paid lawful charges remunerations or expenses by his principal and of goods of principal are under his control he can retain the goods until the lawful charges is paid by principal. This right last till the lawful charges are fully satisfied 3. Right to get indemnity • If principal removes the agent without concrete reason agent has right to claim compensation from his principal. Therefore, agent has also right to continue business performance until nothing is wrong done by agent.
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