Agency-Ss.

182-238
Agency is the RELATIONSHIP between Principal and Agent.

Representative character

&

Derivative authority

Are TWIN TEST to determine the existence of agency.

CASE
KRISHNA v. GANAPATHI
[AIR1955 Mad. 648] RAMASWAMI, J. said: In legal Phraseology, every person who acts for Another is not an agentIt is only when he acts as a representative of the other in business negotiations, i.e. to say, in the CREATION, MODIFICATION, OR TERMINATION of contractual obligations, between the other [PRINCIPAL] and third persons, that he is an agent. Representative character and derivative authority may briefly be said to be the distinguishing feature of an agent.

USE OF THE WORD AGENT IS NOT FINAL TEST

DETERMINATION OF AGENCY DEPENDS UPON ABOVE TWO TESTS AND NOT ON USE OF THE WORD AGENT IN THE CONTRACT. A PERSON MAY NOT BE AGENT ALTHOUGH WRITTEN IN THE CONTRACT. CONVERSELY A PERSON MAY BE AN AGENT IF HE SATISFIES TWO TESTS.

Types of the Principal

Where name of the Principal is 1.Named told by the Principal agent to the third person.

Types of the Principal

2. Unnamed Principal. S. 230

Where agent does not discloses the name of the Principal but discloses that he is acting in REPRESENTING CHARACTER then principal is known as Unnamed Principal.

Types of the Principal

3. Undisclosed Principal. S.231

Where the agent neither discloses the name of the Principal nor the Representative character, Principal is known as Undisclosed Principal.

Types of the Principal

4. Co-Principal
Two persons may appoint same person as an agent. In that case Principals are known as Co-Principals.

Types of the Agent

1. FACTOR. He is a mercantile agent to whom goods are entrusted for sale. 2. BROKER. He is a mercantile agent who is employed to negotiate and make contracts for sale and purchase of goods. He is different from FACTOR in the sense that he dont have possession of goods.

Types of the Agent

3. DEL CREDERE AGENT: The main feature of Del Credere agent is that he ensures to the Principal for the performance of the Contract. For which he gets extra remuneration.

Types of the Agent

4. AUCTIONEER: A auctioneer is the person who sells the goods of the Principal by auction. All above categories of agent are part of MERCANTILE AGENT (as defined in s.2(9) of Sale of Goods Act.

Who can be Principal? S.183

Any person who is (i) MAJOR and (ii)SOUNDMIND may employ agent.

According to LAW COMMISSION OF INDIA S. 183 is RESTRICTED to NATURAL PERSONS and it excludes CORPORATIONS and other LEGAL PERSONS, who can also employ agent.

Who can be Agent? S. 184

Any person may be agent. He need not be MAJOR.

Is CONSIDERATION necessary? S. 185

Consideration is NOT NECESSARY for the creation of agency.

Agency is an exception of Doctrine of PRIVITY.

Contract of agency is an exception to doctrine of PRIVITY OF CONTRACT. Once a contract is complete between third party and principal, agent is OUT OF PICTURE. But still he has right in certain cases. And he can sue to third party for the PERFORMANCE OF CONTRACT. (S.230-Unnamed principal) Similarly, in cases of agency COUPLED WITH INTEREST he can sue to third party.

S. 186. Agency may be

EXPRESS

IMPLIED

MODES OF CREATION OF AGENCY

According to ANSON & CHESHIRE&FIFOOT

there are 5 modes for creation of agency.

1.

By an ACTUAL AUTHORITY of principal-Express appointment. 2. By the OSTENSIBLE AUTHORITY of the principal-Implied agency or agency by Estoppel. 3. By a LEGAL PRESUMPTION-Agency between husband &wife. 4. By RATIFICATION. 5. By IMPLICATION OF LAW- Agency of NECESSITY.

Agency between husband and wife

According to HORNBY, As long as people continue to live in houses, the wife will normally do the household shopping, and the husband will pay the bill. CONDITIONS: 1. They must be LIVING TOGETHER. 2. They must be living in a DOMESTIC ESTABLISHMENT of their own and not in a rented hotel. 3. Agency extends only for NECESSARIES and not for LUXURIES.

Agency of NECESSITY

Send the horse to B by Railway.

B
(Consignee )

A (owner of horse)

Great Northern Railway v. Swafield A send his horse to B by Railway ( Defendant Co). The horse was not received by anyone at the destination. Railway co. has no arrangement for keeping animals and therefore, kept it in an ASTABAL. Later on B came and demanded the horse. Co. demanded the lawful charges of maintaining the horse. B refused. Court held that railway was entitled for expenses. There was agency by necessity.