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Agency

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16 views4 pages

Agency

Uploaded by

tishaagarwal234
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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For examination purposes only

SYNOPSIS: AGENCY
Essentials:
i. Principal (sec 183) - adult, sound mind
ii. Agent (sec 182, 184) – any person (minor, unsound mind)
iii. Consideration (sec 185) – not necessary
iv. Representative capacity of agent (distinguishing test of agency)
Kuchwar Lime & Stone Co v Dehri Rohtas Light Railway & Co Ltd AIR 1969 SC 193
State of Madras v Jayalakshmi Rice Mill Contractors Co AIR 1959 AP 352

Kinds of Agent:
a. Factor
b. Broker
c. Del credere agent
Couturier v Hastie (1953) 9 Exch 102

Agent-Servant and Agent-Bailee differences


• Contractual obligations
• Supervision
• Remuneration
• Multiple principals
• Possession of goods
Lakshminarayan Ram Gopal & Son Ltd v Govt of Hyderabad AIR 1954 SC 364

Creation of Agency:
i. Expressly - by will of parties
ii. Estoppel – by conduct of parties
Smith v Mose (1940) 1 KB 424
Delhi Electric Supply Undertaking v Basanti Devi AIR 2000 SC 43
iii. Necessity
Great Northern Rly Co v Swafield (1874) LR Ex 103
Prager v Blastpiel Stamp & Heacock Ltd (1924) 1 KB 566
Gwilliam v Twist (1895) 2 QB 84
Sachs v Milkos (1948) 2 KB 23
iv. Ratification
Express/implied – Act on behalf of another – Competent principal – Knowledge of
material facts – Whole transaction ratified – Reasonable time – No injury to third
party
Bolton Partners v Lambert (1889) 41 Ch.D 295
Hukumchand Insurance Co v Bank of Baroda AIR 1977 Kant 204
Keighley Maxeted & Co. v Duncan (1901) AC 240

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Grover & Grover Ltd v Mathews (1910) 2 KB 401


Krishna Kumar v Electrical Engineer AIR 1979 SC 1912

Authority of Agent:
1. Actual authority – sec 186- 189
a. Express authority
b. Implied authority
• Extent of agent’s authority: sec 188, 189
Dingle v Hare (1859) 7 CB NS 145
2. Ostensible / apparent authority - sec 237
Apparent authority – not actually authorised – appears to be authorised – conduct
of principal – principal bound to third party
Hely-Hutchinson v Brayhead Ltd (1968) 1 QB 549
Hambro v Burnard (1904) 2 KB 10
Watteau v Fenwick (1893) 1 QB 346
Bissessardas Kasturichand v Kabulchand AIR 1945 Nag 121

3. Exceeding authority – sec 227, 228


Sec 227 – severable ; Sec 228 – non-severable

Rights of Agent:
i. Right to remuneration – sec 219, 220
Peacock v Freeman (1888) 4 TLR 541
Continental & Eastern Agencies v Coal India Ltd AIR 2003 Del 387
ii. Right of retainer – sec 217
iii. Right to lien – sec 221
In re Bombay Saw Mills Co. (1888) ILR 13 Bom 314
iv. Right to indemnity – sec 222-224
Hichens v Jackson 1943 AC 266
Adamson v Jarvis (1827) 130 ER 693
Kishanlal v Bhanwarlal AIR 1954 SC 500
v. Right to compensation – sec 225

Duties of Agent:
i. To execute purpose of agency
Pannalal Jankidas v Mohanlal AIR 1951 SC 144
ii. To follow instructions of principal – sec 211, 214
Solomon v Barker (1862) 175 ER 1258
Ireland v Livingston 1872 LR 5 HL 395
iii. Reasonable care and skill – sec 212

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Keppel v Wheeler (1927) 1 KB 577


iv. To avoid conflict of interest – sec 215, 216
Fiduciary capacity of agent towards principal
De Bussche v Alt (1878) 8 Ch.D 286
v. Not to make secret profit
Shipway v Broadwood (1899) 1 QB 369
vi. To pay due amounts – sec 218
vii. To maintain accounts – sec 213
viii. Not to delegate – sec 190
• General rule: delegatus non potest delegare
• Exceptions: Nature of work – Trade custom – Ministerial work – Consent of
principal

Sub-agent: sec 191 – 193


Union of India v Md. Nizam AIR 1980 SC 431
• Sub-agent not directly liable to principal for loss except for fraud, wilful wrong –
Principal bound by act of sub-agent to third party
Summan Singh v National City Bank of New York AIR 1952 Punj 172
• Improper delegation: sec 193: principal not bound to third party for sub-agent’s acts
– agent deemed to be sub-agent’s principal
Substituted Agent: sec 194, 195
PNB v Ishwarbhai Patel AIR 1971 Bom 348
Qamar Shariff Tyabji v Commr, Excess Profits Tax AIR 1960 SC 1269
• Person named by agent, appointed by Principal – principal bound by act of
substituted agent to third party – substituted agent liable to principal for any loss

Liabilities of Agent: sec 230


General rule: agent not bound to third party – agent not entitled against third party
Exceptions: agent personally liable to third party:
i. Foreign principal
Nandan Iron & Metal Industries v Fenesty Inc & Anr AIR 1992 Del 364
ii. Incompetent principal
Kelner v Baxter (1866) 2 CP 174
iii. Undisclosed principal – sec 231, 232
a. Principal’s existence known, identity not known – sec 226
Southwell v Bowditch (1876) 1 CPD 374
b. Principal’s existence & identity unknown – sec 231
Said v Butt (1920) 3 KB 497
Montagu v Forwood (1893) 2 QB 350
iv. False/ pretended agent – sec 235, 236

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Third party believes in existence of principal but agent acting for own – principal
not liable to agent / third party – third party not liable to agent – agent liable to third
party

Rights of Principal:
i. Right to reasonable care & skill from agent – sec 212
ii. Right to accounts – sec 213
iii. Right to repudiate transaction on agent’s dishonesty – sec 215
iv. Right to benefit gained by agent – sec 216
v. Right to due amount – sec 218

Duties of Principal:
i. Duty to pay remuneration – sec 219
ii. Duty to indemnify – sec 222-224
iii. Duty to compensate – sec 225

Termination of Agency: sec 201


i. Revocation by principal: sec 202-207
Kishni Devi v State of Rajasthan AIR 1992 Raj 24
Boulation Bros & Co Ltd v New Victoria Mills Co Ltd AIR 1929 All 87
Prickett v Badger (1856) 140 ER 123
ii. Renunciation by agent: sec 205 -207
iii. Completion of agency business
iv. Death of principal or agent
In re Watson (1886) 18 QBD 116
v. Unsoundness of mind of principal or agent
Mahendra Pratap Singh v Padam Kumari Devi AIR 1993 All 143
vi. Insolvency of principal
vii. Expiry of specified period of agency

Effects of termination of agency: sec 208-210


Notice of termination to 3rd parties – Reasonable measures for preservation of deceased
principal’s business – sub-agency terminates automatically

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