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Thread: define contract of agency. How is it revoked?

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    Moodle define contract of agency. How is it revoked?

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    Contract of agency
    Q. define contract of agency. How is it revoked? (2001)
    Q. In what various ways does an agency come to an end.
    1. Introduction:
    The expression agency is used to cannot the relation which exist where one person has an authority or capacity to create legal relations between a person occupying the position and third parties.
    2. Definition:
    The contract which creates the relationship of principalí and agentí is called an agency.
    3. Parties to agency:
    There are two parties in the contract of agency.
    (I) Agent:
    He is a person employed to do any act for another in dealing with the third parties.
    (II) Principal:
    He is a person who is represented by the agent.
    Case law
    2002 C. L. D 77
    It was held that agent is the connecting link between the principal and third person a sort of conduct pipe or an intermediary who has the powers to create legal relationship between principal and third person.
    4. Essentials of agency:
    Following are the essentials of agency.
    (I) Principal should be competent:
    It is necessary that principal should be legally competent to contract.
    (II) Agreement:
    There must be an agreement between principal and agent.
    (III) Consideration is not necessary:
    In order to create an agency the consideration is not necessary.
    (IV) Intention:
    The agent must have intention to act on behalf of the principal.
    5. Form of contract of agency:
    The contract of agency may be in writing or it may be oral be implied.
    2002 C. L. D 1031
    It was held that agency need not be express and can be implied.
    6. Creation of agency:
    Agency may be created in the following ways:
    (I) Agency be express agreement:
    When authority is given to an agent by words or written.
    (II) Agency by implication:
    Implied authority may arise by conduct, situation of parties or circumstances of the case.
    (III) Agency by estoppels:
    If a person by conduct holdout another person as his agent to make contract on his behalf, he will bound by contract made by such persons on his behalf though he may not in fact an agent.
    (IV) Agency by holding out:
    If agency is created in prior positive act of the principal.
    (V) Agency by necessity:
    If agency is created without the consent of principal. It is created in emergency.
    (VI) Agency by ratification:
    When an unauthorized agent makes a contract on behalf of his principal without his knowledge. After ward principal may accept or ratify the contract. It is called agency by ratification.
    (VII) Specified agency:
    When principal appoints an agent only for a specified purpose. It is called specified agency.
    7. Termination of agency:
    Agency is terminated on the following ways.
    (I) Agreement:
    By mutual agreement of the principal and agent agency can be terminated.
    (II) Revocation by the principal:
    The principal can revoke the authority of the agent at any time before the agent has exercised his authority.
    (III) Revocation agent:
    If the agent gives up the authority then agency is dissolved.
    (IV) Completion of the business of agency:
    After completion of job the agency is dissolved.
    (V) Expiry of time:
    In case of fixed period agency is terminated with the expiry of time.
    (VI) Death of the principal:
    On the death of the principal agency is terminated.
    (VII) Death of agent:
    On the death of agent agency is terminated.
    (VIII) Insanity of principal:
    On insanity of principal agency is terminated.
    (IX) Insanity of agent:
    On insanity of agent, agency is terminated.
    (X) Insolvency of principal:
    If principal becomes insolvent it is terminated.
    (XI) Destruction of subject matter:
    If the subject matter is destroyed agency is also terminated:
    (XII) Winding up of company:
    At the winding up of company agency is terminated.
    (XIII) Illegality of contract:
    Agency may be terminated by illegality of contract.
    8. Conclusion:
    To conclusion it can be said that, agency is a relationship existing between principal and agent. Agency can be terminated under contract act 1872 by following the method provided by this act. So by agency is meant employment for purpose of bringing the employer into legal relationship with another party called agent. Any person may become agent provided he is of age of majority and sound mind. No consideration is necessary to create agency.

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