Contract of Agency

Defination: A person who has capacity to contract may enter into a contract with another through another person , then he is said to be acting through an agent . The person for whom such act is done , is called the principal .The function of an agent is to bring his principal into contractual relations with third persons.

Rules of agency
Whatever a person can do personally , he can do through an agent. He who does an act through another does it by himself

Agent and Servant

Creation of Agency
The relationship of principal and agent may arise: By express agreement By implied agreement By ratification By operation of law

Classification of Agents
On the basis of authority Special agent General agent Universal agent On the basis of nature of work performed (a) Commercial or mercantile agents Factor Auctioneer Broker Commission agent Del credere agent Banker

(b) Non-mercantile agents Attorneys Solicitors Insurance agents

Relations of Principal and Agents

Duties of agent Rights of agent Duties of principal Rights of principal

Relations of Principal with Third parties

Extent of agents authority

The authority of the agent to bind the principal may be : Actual authority Ostensible authority
Position of principal and agent in relation to third parties Personal liability of agent

Termination of Agency
The various modes of termination of agency are as given below. (a) Termination of agency by act of the parties Agreement Revocation by the principal Revocation by the agent (b) Termination of agency by operation of law Performance of the contract Expiry of time Death and insanity Insolvency Destruction of subject-matter Dissolution of a company Principal becoming an alien enemy