CONTRACTS CA3

Section 182 – Agent and Principal defined

Section 183 – Agent can be employed by – who is major and possess a sound mind
Section 184 – Conditions to become agent – should be major and of sound mind.
Section 185 – No consideration is necessary to create an agency.
Section 186 – The authority of an agent may be expressed or implied.
Section 187 – Definitions of express (given by words spoken or written) and implied (when it is
inferred from the circumstances of the case) authority.
(Things spoken or written; or the ordinary course of dealing may be accounted as circumstances
of the case)
Section 188 – Agent’s Authority to do an act or carry on a business – Authority to do every
lawful thing necessary in order to such an act or conducting such business.
Section 189 – Agent has authority (in emergency) to do acts for the purpose of protecting his
principal from loss (as would be done by a prudent person in similar circumstances)
Section 190 – Agent cannot lawfully employ another person for an act which he undertook
personally; unless by the ordinary custom of trade a sub agent may, or, from the nature of the
agency, a sub agent must be employed.
Section 191 – Sub Agent – A person employed by and acting under original Agent.
Section 192 – When a Sub Agent is properly appointed then Principal is bound and
responsible for his acts.
Agent is responsible to Principal for the acts of Sub Agent.
Sub Agent is responsible for his acts to the agent and not to the principal
(Except – Fraud and Willful Wrong)
Section 193 – Agent is responsible for sub agent appointed without authority and the sub agent is
not responsible to the principal.
Section 194 – when principal give authority to agent to name another person to act under him
then the person named will be an agent and not sub-agent.
Section 195 – If agent appoint such person mentioned in Sec. 194 by acting as a prudent man
then the Agent is not responsible to the Principal for the acts of the person appointed.
Section 196 – Ratification – Acts done by one person on behalf of another but without his
knowledge or authority and the person on whose behalf acts are done ratifies the acts then the
same effects will follow as if they have been performed under his authority,
Section 197 – Ratification may by expressed or implied in the conduct of the person on whose
behalf the acts are done.
Section 198 – No Valid ratification can be made by a person whose knowledge of the facts of the
case is materially defective.
Section 199 – If a person ratifies any unauthorized act done on his behalf then he ratifies the
whole transaction of which such act formed a part.
Section 200 – IF ratification of an act done without the authority of a person would result in
injury to the interest a third person, the ratification would be invalid.
Section 201 – Termination of Agency
1. When Principal revokes his authority.
2. When agent renounce the business of agency.
3. When the business of agency completes.
4. When either the Principal or Agent dies or become of unsound mind.
5. When the principal is being adjudicated insolvent.
Section 202 – IF the agent has interest in the property which formed the subject matter of the
agency then the agency cannot be terminated in the absence of express contract and to the
prejudice of such interest.
Section 203 – The Principal can revoke the authority given to Agent before it has been exercised
so as to bind the principal.
Section 204 – Principal cannot revoke the authority given to his agent after the authority has
been partly exercised.
Section 205 – If there is any express or implied contract that the agency should be continued for
a period of time and then principal revokes agency without sufficient cause before the fixed date
then he needs to compensate to the agent.
Section 206 – Reasonable Notice must be given of such revocation or renunciation; otherwise the
damage suffered by the plaintiff or agent must be made good to one by the other.
Section 207 – Revocation may be express as well as implied.
Section 208 – The termination of the authority of an agent does not take effect before it becomes
known to him or the third person which he is dealing with.
Section 209 – IF the agency is terminated by the death or insanity of the principal then the agent
is bound to take on behalf of the principal all reasonable steps for the protection and preservation
of the interests entrusted to him.
Section 210 – The termination of authority of an agent causes the termination of the authority of
all sub agents appointed by him.
Section 211 – Agent is bound to conduct the business according to the directions given or in
absence of the directions he should follow the custom which prevails in the market. If the agent
acts otherwise then he must make good the loss and if any profit is accrued then he must acoount
for it.
Section 212 – An agent is bound to conduct the business with as much skills as is generally
possessed by a person in similar business.
Section 213 – An agent is bound to give proper accounts to his principal on demand.
Section 214 – Duty of agent to communicate to principal in case of difficulty and he should be
seeking to obtain his instructions.
Section 215 – IF an agent deals on his own without taking prior consent of the principal then the
principal can repudiate the transaction if he feels that any facts has been concealed dishonestly or
the dealing is disadvantageous to him.
Section 216 – If an agent deals on his own account rather than principal’s account then the
principal is entitled to the gain or benefit which resulted from the transaction.
Section 217 – An agent can retain the sums received out of the transaction for the purpose of
expenses incurred by him or any advances made by him and also the remuneration as may be
payable to him for acting as agent.
Section 218 – Subject to the deduction in Section 217, an agent is bound to pay the remaining
amount to the principal.
Section 219 – Agent’s remuneration does not become due to him until the completion of act
assigned to him. This rule is subject to any special contract between the principal and the agent.
Section 220 – An agent who is guilty of misconduct is not entitled to any remuneration in respect
of that part which he has misconducted.
Section 221 – In the absence of any contract to the contrary an agent is entitled to retain goods,
papers and other property whether movable or immovable (of the principal) received by him,
until the amount due to himself for commission, disbursement and services in respect of the same
has been paid.
Section 222- The employer of an agent is bound to indemnify him against the consequences of
all lawful acts done by such agent in exercise of the authority conferred upon him.
Section 223 – The agent is also entitled to indemnify against the consequences of an act done in
good faith, even though the act causes an injury to the rights of third person.
Section 224 – If one person employs another to do a criminal act then the person employed
cannot claim indemnity even though the principal has expressly or impliedly promised to
indemnify him.
Section 225 – The principal must make compensation to the agent in respect of injury caused to
the agent by the principal’s neglect or want of skill.
Section 226 – Contracts entered by an agent and obligations arising from it will have the same
consequences as if the act is done by the principal himself.
Section 227 – If the acts done by an agent within the authority and those outside can be separated
then the part which is within his authority is binding between the agent and the principal.
Section 228 – When an agent does more than which he is authorized to do, and what he does
beyond the scope of authority cannot be separated from what is within it then the principal is not
bound to recognize the transaction.
Section 230 – An agent cannot personally enforce contracts entered into by him nor he is
personally bound by them.
An agent is presumed to have consented to be personally liable in the following cases:-
1. Where the contract is made by an agent for the sale or purchase of goods for a
merchant resident abroad.
2. Where the agent does not disclose the name of his principal.
3. Where the principal, though disclosed, cannot be sued.
Section 234 – When the third person agrees that he will make only one of them (principal or
agent) liable and not the other and if he induced such a belief then he is bound thereby.