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Thread: Discuss in detail rights and duties of an agent

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    Moodle Discuss in detail rights and duties of an agent

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    Rights and duties of agent
    Q. Discuss in detail rights and duties of an agent. (1998)
    Q. What is the range and extent of the authority of an agent? How can it be revoked? (1999)
    Q. In what cases can an agent himself sue or be sued by the party with whom he has entered into a contract on behalf of the principal. (2003)
    1. Introduction:
    The contract which creates relationship of principal and agent is called agency. An agent is involving party to the contract of agency. He is merely connecting link. His authority can be revoked by the principal.
    2. Agent:
    He is a person employed to do any act for another in dealing with third parties.
    3. Appointment of agent:
    According to sec. 183
    “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.
    4. Who may be agent:
    According to Sec. 184
    “As between the principal and third person, any person may become an agent, but no person who is not of the age of majority and of sound mind can become an agent, so as to reasonable to his principal to his according to provisions in that behalf herein contained.
    5. Case law
    Girdhari Vs. Grawford 1885
    All 147, i55
    It was held that liability of a husband for a wife’s debt depends on the principles of agency, and the husband can only be liable when it is shown that he has expressly or impliedly sanctioned what the wife has done.
    6. Kinds of agent:
    Following are kind of agent.
    (I) Del-credere agent:
    A del-credere agent is an agent, who guarantees to his principal that person to whom he sells will pay for that, if he will not pay, he will be liable. It is a type of mercantile agent.
    (II) Factor:
    A factor is an agent to whom goods are entrusted for sale.
    (III) Mercantile agent:
    A mercantile agent is the person who has authority to sell the goods or to buy goods or to raise money on the security of goods.
    (IV) Banker:
    The relationship between banker and his customer is that of debtor and creditor.
    (V) Auctioner:
    An auctioner is an agent who is authorized to sell goods to the highest bidder at a public sale for commission.
    (VI) Sub-agent:
    A sub-agent is a person employed by and acting under the control of the original agent in the business of agency.
    (VII) Broker:
    A broker is an agent employed for buying or selling the goods or other property. He simply acts between the two parties.
    (VIII) Indenter:
    He is an agent who, busy or sells on behalf of his principal.
    (IX) Advocate:
    An advocate also acts an agent. He appears on behalf of principal in the court.
    (X) Co-agent:
    Who acts jointly is called co-agent.
    7. Kinds according to extent of authority:
    (I) General agent:
    A general agent is appointed to do all acts in connection with a particular business. Third party may assume that such an agent has power to do all that which is usual for a general agent can do in business.
    (II) Special agent:
    A special agent is appointed to do some particular act or represent his principal in some particular transaction.
    (III) Universal agent:
    A universal agent is a person whose authority is unlimited. He is authorized by principal to do all acts that can be delegated to him.
    8. Rights of agent:
    Following are the rights of agent.
    (I) Right of remuneration:
    It is basic right of an agent.
    (II) Right of commission:
    He has also right of commission.
    (III)Right of lien:
    An agent has right of lien over goods until the payment in due is received by him.
    (IV) Right to retain:
    An agent has right to retain goods, papers and other property until the amount due is paid.
    (V) Right of compensation:
    In case of injury caused to agent by the negligence of principal may be compensated by him.
    (VI) Right to be indemnified:
    An agent has a right to be indemnified against liabilities on him.
    (VII) Right to be indemnified against consequences of acts done in good faith:
    He has right to indemnified against the consequences of act done in good faith even through it causes an injury to the rights of third person.
    (VIII)Right of stoppage of goods in transit:
    He has right of stoppage of goods in transit.
    9. Duties of an agent:
    Following are the duties of an agent:
    (I) Obey the instructions:
    He should obey the instructions of the principal.
    (II) Conducting business:
    It is the duty of agent to conduct the business of principal.
    (III) Showing of accounts:
    He should maintain the accounts and show to principal on his demand.
    (IV) Return of undue profit:
    If an agent has earned undue profit from the business he should return it to principal.
    (V) Use of skill and knowledge:
    Agent should perform his duties as much skill and knowledge as is generally shown ordinary prudence in similar business.
    (VI) Payment of all sums:
    He should pay all sums to his principal received on his account.
    (VII) Separate accounts:
    He should not mix his account with the principal and maintain separate accounts.
    (VIII) Duty in case principal die or become insane:
    He should protect the interest of legal heirs.
    (IX) Not to delegate authority:
    He should not delegate his authority to any other.
    (X) Duty to communicate with principal:
    He should give all information to principal about the matters of business.
    (XI) Should not make any secret profit:
    He should not make any secret profit.
    (XII) Performance with honesty:
    He should deal the business honestly. If he conducts the business dishonestly then he is not entitled to receive the reward of his services.
    10. Extent of authority of agent:
    An agent having authority to do an act has authority to do every lawful thing which is necessary in order to do such act. An agent having an authority to carry on business has authority to do every lawful thing necessary for the purpose’ or usually done in the course of conducing such business.
    11. Agent’s authority in case of emergency:
    He has authority to do all such acts for the purpose of protecting his principal from all losses.
    Illustration:
    An agent for sale may have goods repaired if it be necessary.
    12. Revocation the authority of agent:
    In the following ways authority is revoked.
    (i) If principal revoke authority before agent has exercised his power,
    (ii) In case of death of agent,
    (iii) In case of death of agent,
    (iv) If agent give up business of agency,
    (v) In case of insanity of principal,
    (vi) In case of insanity of agent,
    (vii) If principal becomes insolvent,
    (viii) If subject matter of the agency is destroyed
    (ix) On expiry of time.
    13. Ground on which an agent can be sued:
    Agent can be sued on the following grounds.
    (i) When he does not disclose the name of the principal.
    (ii) When agent receive money by mistake or fraud.
    (iii) When agent performs any act without the authority of principal.
    (iv) If agent made a contract with a foreigner for the sale or purchase of goods.
    (v) If he make contract in his own name and not by the name of principal.
    (vi) If an agent has agreed to accept the liability of the third party.
    (vii) If an agent on the bill of exchange without disclosing that he is singing on behalf principal.
    14. Conclusion:
    To conclusion it can be said that, agent is authorized to create a contract between his principal and third party. An agent can-be sued on his personal liabilities and the authority of an agent can be revoked.

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