Agency Essay

1720 WordsOct 14, 20147 Pages
Contracts Assignment: AGENCY Introduction: The Indian Contract Act, 1872 explains about agency (Ss. 182-238) Section 182 defines Principal and Agent. 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 act is done, or who is so represented, is called the principal. Agent is one who is employed by another (Principal), to do any act for another (Principal), or to represent another (Principal) dealing with third parties. 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. Minors, persons in a state of unsound mind; and persons who are disqualified from contracting by law, any law to which they are subject, are not competent to contract. Therefore these persons cannot employ agents under a contract of agency. However under certain circumstances of emergency and necessity, a person can become an agent for these people for their benefit, subject to the other provisions of the law. Authority of an Agent: 1. It must be expressed (in document written format) 2. Conduct of parties 3. Necessity 4. By ratification The agent authority may be expressed or implied. Servant: Agent and servant are not equal both vary from one another. Master has right to say how a work should be done. Servant acts under master guidelines and bound to it. Servant paid by the way of salary. Master would be liable if any wrong act committed by the servant employment. In the contract of employment there would be two parties’ i.e, principal and servant. Extent of Agent’s authority: The agent can neither sue nor be sued on a contract entered into with a third party. Example case: Harshad J.Shah and another vs LIC of India (SC 1997 SSC 64). However in certain times agent

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