1. Formation of Agency
1.1. a) By express & implied appointment
1.1.1. Section 140 of CA 1950
1.1.1.1. Agent
1.1.1.1.1. By writing
1.1.1.1.2. By words
1.1.2. By conduct/circumstances of sitution
1.2. b) By Ratification
1.2.1. Section 149 of CA 1950
1.2.1.1. 1) The agent had exceeded the authority Or
1.2.1.2. 2) A person had acted without an authority
1.2.1.3. 3) The principal either ratify or reject your contract
1.2.1.4. 4) If ratify, the principal will be bound by the contract
1.2.2. Conditions/elements
1.2.2.1. 1) The act : Exceed/without authority
1.2.2.2. 2) Must be legal act
1.2.2.3. 3) The agent /the person must act as agent
1.2.2.4. 4) The principal must must be existed
1.2.2.5. 5) The principal must have contractual liability
1.2.2.6. 7) The principal must ratify the whole act/contract
1.2.2.7. 6) The principal must have full knowledge at the time when he retifies
1.2.2.8. 8) Ratify within the reasonable time
1.2.3. Authority : Agent must not use own name to contract
1.3. c) By necessity
1.3.1. Section 142 of the CA 1950
1.3.1.1. In the case of emergency
1.3.1.2. Act for the purpose of 'protecting' his principal from loss
1.3.1.3. As would be done by the ordinary person
1.3.2. Maybe created if the following 4 conditions : 1) There must be a real & actual emergency 2) The agent was entrusted with the principal's property or goods 3) Is impossible for the agent to get the principal's instruction at that time (s. 167) 4) The agent must have acted in good faith
1.3.3. The 3 effects of agency created by necessity:- 1) The agent will be not protected from any claim from the principal 2) The agent will be entitled to claim whatever preserve the safety & interest of the principal. 3) A contract exists between principal & 3rd party
1.4. d) By the doctrine of estoppel/holding out
1.4.1. If a person, by his words/conducts, allows a 3rd party to believe that A is his agent even when A is not, and the 3rd party relies on it to his detriment, that person will be estopped/precluded from denying the existence of A's authority
2. Intro
2.1. Introduction : Section 135 of Contract act 1950
2.1.1. Agent : A person employed to do an act for another / represent another in dealing with 3rd person
2.1.2. Principal : A person to whom such act is done, or who is so represented
2.2. Section 136 of CA 1950
2.2.1. Who can be a principal : 1) Above 18 years old 2) Sound mind
2.3. Can a minor become principal?
2.3.1. NO!!!!!!
2.4. Can a minor become an agent?
2.4.1. YES
2.4.2. But he will NOT responsible for his act. The principal will bear the risk/consequences of his act. (Section 137 of CA 1950)
3. Classification of agency
3.1. A) Classification According to the Extent of authority
3.1.1. 1) A universal Agent 2) A general Agent 3) A special Agent
3.2. B) A classification according to the functions
3.2.1. A) Del Credere agent B) Factors C) Brokers D) Auctions E) Bankers
4. Actual Authority of and Agent
4.1. General rule Agent's act is binding on the principal if it done within his authority. If excess of that authority it does not bind the principal unless he adopts/ratifies the unauthorized act
4.1.1. Classified into two
4.1.1.1. Actual
4.1.1.1.1. By express appointment
4.1.1.1.2. By implied appointment
4.1.1.2. Apparent/ostensible authority
4.1.1.2.1. May arise in two situations 1. Where a principal, by his words or conduct, leads a 3rd party to believe that his agent has authority to make contracts for him 2. Where the agent previously had authority to act, but that authority was terminated by the principal without notice to 3rd party
5. Effects of contracts made by agents
5.1. Undisclosed principal The principal's existence and identity is unknown to the 3rd party The 3rd party does not know that the agent is acted on behalf on the principal
5.2. Named principal Principal's name has been disclosed to the 3rd party by the agent agent + 3rd party knows the name and identity
5.3. Disclosed principal Principal's existence is disclosed but the identity (name and details) is unknown
5.4. Rights of the 3rd party
5.4.1. The 3rd party has the right to claim/sue either the agent or the principal or both
5.5. Right of the principal
5.5.1. An undisclosed principal 'may require the performance of the contract' by the 3rd party even though the 3rd party does not know that there is a principal
5.6. Right of the agent
5.6.1. The agent can claim his rights under the contract, if the contract is actually his contract, and he has been acting as if hr were the contracting party with the 3rd party
6. Duties of agent towards principal
6.1. 1) To obey the principal's instruction 2) in the absence of instructions from the principal, to act according to the customs 3) To exercise care and diligence in carrying out hi work and to use such skill as he possesses 4) To render proper accounts when required 5) To communicate with the principal 6 )Not to let his interest conflict with his duty 7) Not to make any secret profit out of performance of his duty 8) To pay his principal all sums received on his behalf 9) Not to delegate his authority to other person
7. Duties of principal towards the agent
7.1. 1. Principal must pay the agent the commission or other agreed remuneration 2. Principal must not to willfully prevent or hinder the agent from earning his commission 3. Principal must indemnify/reimburse the agent for acts done in the exercise of his authority /duty
7.2. New Topic
7.2.1. New Topic
8. Termination of agency
8.1. 2 ways
8.1.1. By act the parties 1. By mutual consent 2. Revocation by the principal 3. Renunciation by the agent
8.1.2. By operation of law 1. Contract of agency has been performed 2. Expiry period fixed in the contract of agency 3. Death of principal of agent 4. Frustration 5. Insanity of principal or agent 6. Insolvency of principal or agent