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00:00Let's get started with special contracts from Indian Contract Act, law relating to agency
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00:26Introduction
00:26A relationship of agency is established when one party, agent, is authorized by another
00:33party, principal, to act on his slash her behalf. Such relationships are initiated when one party
00:40desires to extend his slash her activities beyond his slash her present limits or capacity.
00:46In modern life, it would be impossible for a man to do everything by himself. Thus, he needs agents,
00:53to perform activities. A relationship of agency is commonly visible in all business transactions.
01:01These include hiring employees or retaining the services of other professionals such as an attorney,
01:07design professional, software developer etc. An agent has the potential to form contracts on
01:14behalf of the principal and in doing so, will bind the principal. As a result, the relationship of agency
01:21is one of trust and confidence and an agent must perform his slash her activities in a capable and
01:26conscientious manner. The law of agency is contained in sections 182 to 238 of the Indian Contract Act.
01:36Let's see what is agency. The Indian Contract Act, does not define the word agency.
01:42agency. However, section 182 of the Indian Contract Act defines agent and principal as
01:49agent. Means a person employed to do any act for
01:53another or to represent another in dealing with the third person's end.
01:59The principal. Means a person for whom such act is done or who is so represented.
02:04Test of agency. Whether the person has the capacity to bind the principal and make him
02:10answerable to the third party. Whether he can establish privity of contract between the principal
02:16and third parties. If the answer to these questions is in affirmative, yes, then there is a relationship
02:22of agency. Thus, agency is a comprehensive word used to describe the relationship between one person
02:29and another, where the first mentioned person brings the second mentioned person into legal relation with
02:35others. The rule of agency is based on the maxim key facet per aelium, facet per se that is he who
02:42acts through an agent is himself acting. Appointment and authority of agents.
02:48Who may employ an agent, according to section 183, any person who has attained majority according to the
02:55law to which he is subject, and who is of sound mind, may employ an agent. Thus, a minor or a person of
03:02unsound mind cannot appoint an agent. Who may be an agent, section 184 provides that as between the
03:10principal and third persons any person may become an agent, but no person who is not of the age of
03:15majority and of sound mind can become an agent, so as to be responsible to his principal according to
03:21the provisions in that behalf herein contained. Thus, according to section 184 of the act any
03:27person may become an agent that is even a minor or a person of unsound mind may become an agent and
03:33the principal shall be bound by his acts. But as a rule of caution, a minor or a person of unsound
03:39mind should not be appointed as an agent because he is incompetent to contract and in case of his
03:44misconduct or negligence, the principal shall not be able to proceed against him. Example
03:51Mr. P appoints Mr. Q, a minor, to sell his car for not less than ours. 2,50,000 Mr. Q sells it for ours.
04:022,00,000 Mr. P will be held bound by the transaction and further shall have no right against Mr. Q for
04:10claiming the compensation for having not obeyed the instructions, since Mr. Q is a minor and a
04:16contract with a minor is void of initio. Consideration not necessary. According to section 185,
04:24no consideration is necessary to create an agency. The acceptance of the office of an agent is
04:30regarded as a sufficient consideration for the appointment. Modes of creation of agency.
04:36According to Desij, of the Supreme Court of India the relation of agency arises whenever one person
04:42called the agent has the authority to act on behalf of another called the principal and consents to act.
04:49The relationship has genesis in a contract. The relationship of the principal and the agent may
04:55be created in any of the following ways. Express appointment which is words. Spoken. Written.
05:02Implied appointment. Necessity. Estoppel or holding out. Agency by ratification.
05:11The authority may be express or implied, according to section 186, the authority of an agent may be
05:18express or implied. Definitions of express and implied authority section 187.
05:24Expression. Express authority. An authority is said to be express when it is given by words,
05:31spoken or written. Implied authority. An authority is said to be implied when it is to be inferred from
05:38the circumstances of the case, conduct of the parties and things spoken or written, or in the ordinary
05:44course of dealing, may be accounted from the circumstances of the case. Next. Agency by estoppel
05:51section 237. An agency by estoppel is based on the principle of estoppel. The principle of estoppel
05:59lays down that when one person by declaration, representation, act, or omission has intentionally
06:06caused or permitted another person to believe a thing to be true and to act upon such belief,
06:11he shall not be allowed to deny his previous statement or he shall be stopped to deny his
06:15previous statement or conduct. The agency by estoppel is provided under section 237 of the Indian contract
06:23act. Section 237 states. When an agent has without authority done acts or incurred obligations to third
06:31persons on behalf of his principle the principle is bound by such acts or obligations if he has by his
06:36words or conduct induced such third persons to believe that such acts and obligations were within the
06:42scope of the scope of the agent's authority. According to section 237 of the contract act,
06:48an agency by estoppel may be created when following essentials are fulfilled.
06:531. The principle must have made a representation.
06:572. The representation may be express or implied.
07:023. The representation must state that the agent has an authority to do certain act although really he has
07:08no authority. 4. The principle must have induced the third person by such representation, and
07:165. The third person must have believed the representation and made the contract on the
07:22belief of such representation. Necessity. An agency of necessity arises due to some
07:28emergent circumstances. In emergency a person is authorized to do what he cannot do in ordinary
07:35circumstances. Thus, where an agent is authorized to do certain act, and while doing such an act,
07:42an emergency arises, he acquires an extraordinary or special authority to prevent his principle from loss.
07:50Next. Ratification. Rights of person as to acts done for him without his authority,
07:56effect of ratification § 196. Where acts are done by one person on behalf of another,
08:04but without his knowledge or authority, he may elect to ratify or to disown such acts. If he ratifies
08:10them, the same effects will follow as if they had been performed by his authority. In simple words,
08:17ratification means approving a previous act or transaction. Ratification may be express or implied
08:24by the conduct of the person on whose behalf the act was done. Essentials of a Valid Ratification
08:301. Ratification may be expressed or implied § 197. Ratification may be expressed or may be implied
08:39in the conduct of the person on whose behalf the acts are done. Example.
08:45MR.A, without MR.B's authority, lends MR.B's money to MR.C. Afterwards MR.B accepts interests on the money
08:55from MR.C. MR.B's conduct implies a ratification of the loan.
09:012. Knowledge Requisite for Valid Ratification § 198. No valid ratification can be made by a person
09:09whose knowledge of the facts of the case is materially defective. Example.
09:14MR.A has an authority from MR.B to buy certain goods at the market rate.
09:20He buys at a higher rate but MR.B accepts the purchase. Afterwards MR.B comes to know that the
09:27goods purchased by MR.A for MR.B belong to MR.A himself. The ratification is not binding on MR.B.
09:36If, however the alleged principle is prepared to take the risk of what the purported agent has done,
09:42he can choose to ratify without full knowledge of facts.
09:453. Effect of ratifying unauthorized act forming part of a transaction § 199.
09:53A person ratifying any unauthorized act done on his
09:57behalf ratifies the whole of the transaction of which such act formed a part.
10:02There can be ratification of an act in entirely or its rejection in entirely.
10:07The principle cannot ratify a part of the transaction which is beneficial to him and reject the rest.
10:124. Ratification of unauthorized act cannot injure third person § 200.
10:20An act done by one person on behalf of another, without such other person's authority, which,
10:26if done with authority, would have the effect of subjecting a third person to damages,
10:31or of terminating any right or interest of a third person, cannot, by ratification, be made to have such effect.
10:38In other words, when the interest of third parties is affected, the principle of ratification does not apply.
10:47Ratification cannot relate back to the date of contract if third party has in the intervening time acquired rights.
10:53Example, MR.A, not being authorized thereto by MR.B, demands on behalf of MR.B, the delivery of a chattel, the property of MR.B, from MR.C, who is in possession of it.
11:09This demand cannot be ratified by MR.B, so as to make MR.C liable for damages for his refusal to deliver.
11:175. Ratification within reasonable time. Ratification must be made within a reasonable period of time.
11:266. Communication of ratification. Ratification must be communicated to the other party.
11:347. Act to be ratified must be valid. Act to be ratified should not be void or illegal,
11:40for example payment of dividend out of capital, forgery of signatures, any other criminal offense, or anything which is not permitted under law.
11:51Extent of agent's authority.
11:53The authority of an agent means his capacity to bind the principle to third parties.
11:58The agent can bind the principle only if he acts within the scope of his authority.
12:03The extent of an agent's authority, whether expressed or implied is determined by
12:08The nature of the act or the business he is appointed to do
12:12Things which are incidental to the business or are usually done in the course of such business
12:17The usage of trade or business
12:20Whatever be the nature or extent of the agent's authority, it will always include the authority to do
12:26Every lawful thing necessary for the purpose of carrying it out
12:31Every lawful thing justified by various customs of trades
12:35In an emergency, all such acts for the purpose of protecting the principle from loss
12:41As will be done by a person of ordinary prudence in his own case under similar circumstances
12:46The agent's authority is governed by two principles, namely
12:50In normal circumstances
12:53And
12:54In emergency
12:56Agent's authority in normal circumstances
12:59Section 188
13:00An agent having an authority to do an act has authority to do every lawful thing which is necessary in order to do such act
13:08An agent having an authority to carry on a business has authority to do every lawful thing necessary for the purpose, or usually done in the course, of conducting such business
13:19Agent's authority in an emergency
13:21Section 189
13:23An agent has authority, in an emergency, to do all such acts for the purpose of protecting his principle from loss as would be done by a person of ordinary prudence, in his own case, under similar circumstances
13:36To constitute a valid agency in an emergency, following conditions must be satisfied
13:43Agent should not be in a position or have any opportunity to communicate with his principle within the time available
13:50There should have been actual and definite commercial necessity for the agent to act promptly
13:55The agent should have acted bona fide and for the benefit of the principle
13:59The agent should have adopted the most reasonable and practicable course under the circumstances, and
14:06The agent must have been in possession of the goods belonging to his principle and which are the subject of contract
14:12Sub-agents
14:14When agent cannot delegate Section 190
14:18An agent cannot lawfully employ another to perform acts which he has expressly or impliedly undertaken to perform 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
14:34Sub-agent defines Section 191
14:37A sub-agent is a person employed by, and acting under the control of, the original agent in the business of the agency
14:45Sub-agent refers to case where an agent appoints another agent
14:50The appointment of sub-agent is not lawful, because the agent is a delegatee and a delegatee cannot further delegate
14:57This is based on the Latin principle delegatus non potus delegare
15:02A contract of agency is of a fiduciary character
15:06It is based on the confidence reposed by the principle in the agent and that is why a delegatee cannot further delegate
15:13Exception where an agent can appoint sub-agent
15:161. The appointment of a sub-agent would be valid if the terms of appointment originally contemplated it
15:232. Sometimes customs of the trade may provide for appointment of sub-agents
15:29In both these cases the sub-agent would be treated as the agent of the principal
15:343. Where in the course of the agent's employment, unforeseen emergency arise making it necessary for him to delegate the authority that was given to him by the principal
15:45Representation of principle by sub-agent properly appointed
15:50Section 192
15:51Where a sub-agent is properly appointed
15:541. The principal is, so far as regards third persons, is bound and responsible for the acts of sub-agent
16:03as if he were an agent originally appointed by the principal
16:062. Agent's responsibility for sub-agents
16:10The agent is responsible to the principal for the acts of the sub-agent
16:143. Sub-agent's liability to principal
16:19The sub-agent is responsible for his acts to the agent, but not to the principal, except in case of fraud or willful wrong
16:273. Agent's responsibility for sub-agent appointed without authority
16:31Section 193
16:33Where an agent, without having authority to do so, has appointed a person to act as a sub-agent
16:391. The agent stands towards such person in the relation of a principal to an agent, and is responsible for his acts both to the principal and to third persons
16:502. The principal is not represented by or responsible for the acts of the sub-agent
16:56The sub-agent is not responsible to the principal at all
17:00He is answerable only to the agent
17:03Where the sub-agent is properly appointed
17:06Where a sub-agent is properly appointed, the principal is bound by his acts and is therefore responsible to third parties as if he were an agent originally appointed by the principal
17:16In the case of appointment without authority
17:19In case where the appointment of sub-agent takes place without authority, the principal is not bound by the acts of sub-agent and sub-agent is not answerable to the principal
17:30It is the agent who is the principal of sub-agent
17:33Where the sub-agent purportedly acts in the name of first principal, that first principal may ratify the act of sub-agent
17:41However, if the sub-agent acts in his own name or in the name of the agent who has without authority delegated to the sub-agent the business which is in fact of the principal, the principal cannot ratify such acts of sub-agent
17:55Substituted agent
17:57Substituted agent is a person appointed by the agent to act for the principal, in the business of agency, with the knowledge and consent of the principal
18:06Substituted agents are not sub-agents
18:09They are agents of the principal
18:12Relation between principal and person duly appointed by agent to act in business of agency
18:18Section 194
18:19Where an agent, holding an express or implied authority to name another person to act for the principal in the business of the agency, has named another person accordingly, such person is not a sub-agent, but an agent of the principal for such part of the business of the agency as is entrusted to him
18:37Agent's duty in naming such person
18:40In selecting such agent for his principal, an agent is bound to exercise the same amount of discretion as a man of ordinary prudence would exercise in his own case, and, if he does this, he is not responsible to the principal for the acts or negligence of the agent so selected
18:59Duties and obligations of an agent
19:02The first and foremost duty of every agent is to carry out the mandate of his principal
19:10He should perform the work for which he has been appointed
19:14Any failure in this respect would make the agent absolutely responsible for the principal's loss
19:20In Punnalal Junkidus vs Mohanlal, a commission agent purchased goods for his principal and stored them in a go-down, pending their dispatch
19:29The agent was under instruction to insure them
19:32He actually charged the premium for insurance but failed to insure the goods
19:37The goods were lost in an explosion on Bombay Harbour
19:41The agent was held liable to compensate the principal for his loss
19:45Minus the amount received under the Bombay Explosion, Compensation, Ordnance
19:50Conduct business in accordance with the directions given by the principal
19:55According to Section 211
19:57An agent is bound to conduct the business of his principal according to the direction given by the principal, or, in the absence of any such directions, according to the customs
20:07which prevails in doing business of the same kind at the place where the agent conducts such business
20:13When the agent acts otherwise and any loss is sustained by the principal, he must indemnify him, and, if any profit accrues, he must account for it
20:23Duty of reasonable care and skill
20:26According to Section 212
20:29An agent is bound to conduct the business of the principal with as much skill as is generally possessed by persons engaged in similar business
20:37Unless the principal has notice of his want of skill
20:40The agent is always bound to act with reasonable diligence, and to use such skill as he possesses, and to make compensation to his principal in respect of the direct consequences of his own neglect, want of skill or misconduct, but not in respect of loss of damage which are indirectly or remotely caused by such neglect, want of skill or misconduct
21:02Agent's duty to communicate with principle
21:05It is the duty of an agent, in cases of difficulty, to use all reasonable diligence in communicating with his principal, and in seeking to obtain his instructions
21:17Duty to avoid conflict of interest
21:20Duty not to deal on his own account
21:23Right of principle when agent deals, on his own account, in business of agency without principal's consent
21:30According to Section 215
21:33If an agent deals on his own account in the business of the agency, without first obtaining the consent of his principal and acquainting him with all material circumstances which have come to his own knowledge on the subject, the principal may repudiate the transaction, if the case shows either that any material fact has been dishonestly concealed from him by the agent, or that the dealings of the agent have been disadvantageous to him
21:58Principles right to benefit gained by agent dealing on his account in business of agency
22:03According to Section 216, if an agent, without the knowledge of his principal deals in the business of the agency on his own account instead of on account of his principal, the principal is entitled to claim from the agent any benefit which may have resulted to him from the transaction
22:20Duty not to make secret profits
22:23It is the duty of an agent not to make any secret profit in the business of agency
22:28His relationship with the principal is of fiduciary nature and this requires absolute good faith in the conduct of agency
22:35Secret profit means any advantage obtained by the agent over and above his agreed remuneration and which he would not have been able to make but for his position as agent
22:45Duty to render proper accounts
22:47Section 213
22:49An agent is bound to render proper accounts to his principal on demand
22:53Rendering accounts does not mean showing the accounts but the accounts supported by vouchers
22:59Refer case study, Anand Prasad v. Dvarkhanath
23:03Duty not to delegate
23:05According to Section 190
23:08An agent cannot lawfully employ to perform acts which he has expressly or impliedly undertaken to perform personally, unless by the ordinary custom of trade a sub-agent may, or, from the nature of agency, a sub-agent, must be employed
23:24Agent's duty to pay sums received for principal
23:27Section 218
23:28Subject to such deductions, the agent is bound to pay to his principal all sums received on his account
23:35Duty not to use any confidential information received in the course of agency against the principal
23:41Rights of an agent
23:43Right of retain out of sums received on principal's account
23:47Section 217
23:48This section empowers the agent to retain, out of any sums received on account of the principal in the business of the agency for the following payments
23:57All monies due to himself in respect of advances made
24:01In respect of expenses properly incurred by him in conducting such business
24:06Such remuneration as may be payable to him for acting as agent
24:11The right can be exercised on any sums received on account of the principal in the business of agency
24:17Right to remuneration Section 219
24:20The agent in the normal course is entitled for remuneration as per the contract
24:26In the absence of any agreed amount of remuneration, he is entitled for usual remuneration which is customary in the business
24:34However, an agent who is guilty of misconduct in the business of the agency is not entitled to any remuneration in respect of that part of the business which he has misconducted
24:44Section 220
24:45Agents lean on principal's property
24:48Section 221
24:49In the absence of any contract to the contrary, an agent is entitled to retain the goods, papers, and other property, whether movable or immovable, of the principal received by him
25:02Until the amount due to himself for commission, disbursement, and services in respect of the same has been paid or accounted for him
25:09The conditions of this right are
25:11The agent should be lawfully entitled to receive from the principal a sum of money by way of commission earned or disbursement made or services rendered in the proper execution of the business of agency
25:22The property over which the lien is to be exercised should belong to the principal and it should have been received by the agent in his capacity and during the course of his ordinary duties as an agent
25:33If the agent obtains possession of the property by unlawful means, he cannot exercise particular lien
25:40The agent's right to lien is lost in the following cases
25:44When the possession of the property is lost
25:47When the agent waives his right
25:49Waiver may arise out of agreement express or implied
25:53The agent's lien is subject to a contract to the contrary
25:57Right to indemnity
25:59Right of indemnification for lawful acts
26:02Section 222
26:04The principal is bound to indemnify the agent against all consequences of lawful acts done in exercise of his authority
26:11The right to indemnity extends to all losses and expenses incurred by the agent in the conduct of the business
26:18Where, for example, a stockbroker, on the instructions of a solicitor, contracted to sell certain shares
26:26And had to incur liability to the purchaser by reason of the owner's refusal to complete the sale
26:31The stockbroker was held to be entitled to recover indemnity from the principal
26:35Right of indemnification against acts done in good faith
26:39Section 223
26:41Where the agent acts in good faith on the instruction of principal
26:45Agent is entitled for indemnification of any loss or damage from the principal
26:50Non-liability of employer of agent to do a criminal act
26:54According to section 224
26:57Where one person employs another to do an act which is criminal
27:00The employer is not liable to the agent, either upon an express or an implied promise, to indemnify him against the consequences of that act
27:09Right to compensation for injury caused by principal's neglect
27:14Section 225
27:15Section 225 provides that the principal must compensate his agent in respect of injury caused to such agent due to principal's neglect or want of skill
27:25Thus, every principal owes to his agent the duty of care, and not to expose him to unreasonable risks
27:32Principle's liability to third parties
27:35An agent does all acts on behalf of the principal but incurs no personal liability
27:41The liability remains that of the principal unless there is a contract to the contrary
27:46This is because there is no privity of contract and passing of consideration between the agent and third party
27:53An agent also cannot personally enforce contracts entered into by him on behalf of the principal
28:00Principle's liability for the acts of the agent Section 226
28:04Principle liable for the acts of agents which are within the scope of his authority
28:09Contracts entered into through an agent, and obligations arising from acts done by an agent, may be enforced in the same manner, and will have the same legal consequences, as if the contracts had been entered into and the acts were done by the principal in person
28:25Principle's liability when agent exceeds authority
28:29Section 227
28:31When an agent does more than he is authorized to do, and when the part of what he does, which is within his authority, can be separated from the part which is beyond his authority, so much only of what he does as is within his authority is binding as between him and his principal
28:47Principle not bound when excess of agent's authority is not separable
28:52Section 228
28:53Where an agent does more than he is authorized to do, and what he does beyond the scope of his authority cannot be separated from what is within it, the principal is not bound to recognize the transaction
29:05Exception
29:06Liability of principle-inducing belief that agents' unauthorized acts were authorized
29:12Section 237
29:13When an agent has, without authority, done acts or incurred obligations to third persons on behalf of his principal, the principal is bound by such acts or obligations, if he has by his words or conduct induced such third persons to believe that such acts and obligations were within the scope of the agent's authority
29:33Consequences of Notice Given to Agent
29:36Section 229
29:37Any notice given to or information obtained by the agent, provided it be given or obtained in the course of the business transacted by him for the principal, shall, as between the principal and third parties, have the same legal consequence as if it had been given to or obtained by the principal
29:55Principle's liability for the agent's fraud, misrepresentation, or torts
30:00Section 238
30:03Misrepresentations made, or frauds committed, by agents acting in the course of their business for their principals, have the same effect on agreements made by such agents as if such misrepresentations or frauds had been made, or committed, by the principals, but misrepresentations made, or frauds committed, by agents, in matters which do not fall within their authority, do not affect their principals
30:29Personal liability of agent to third parties
30:32Agent cannot personally enforce, nor be bound by, contracts on behalf of principal Section 230
30:40In the absence of any contract to that effect, an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them
30:51He can neither sue nor be sued on contracts made by him on his principal's behalf
30:56Exceptions
30:58In the following exceptional cases, the agent is presumed to have agreed to be personally bound
31:041.
31:06Where the contract is made by an agent for the sale or purchase of goods for a merchant resident abroad slash foreign principal
31:13When an agent has entered into a contract for the sale or purchase of goods on behalf of a principal resident abroad, the presumption is that the agent undertakes to be personally liable for the performances of such contract
31:262.
31:27Where the agent does not disclose the name of his principal or undisclosed principal, principal unnamed
31:34When the agent does not disclose the name of the principal then there arises a presumption that he himself undertakes to be personally liable
31:42When the principal is undisclosed, the liability under Section 230 is of the agent only, and the principal cannot be sued in such a case
31:513.
31:53Non-existent or incompetent principal
31:55Where the principal, though disclosed, cannot be sued, the agent is presumed to be personally liable
32:034.
32:05Pretended agent
32:06If the agent pretends but is not an actual agent, and the principal does not rectify the act but disowns it, the pretended agent will be himself liable
32:15Section 235
32:175.
32:20When agent exceeds authority
32:21When the agent exceeds his authority, misleads the third person in believing that the agent he has the requisite authority in doing the act, then the agent can be made liable personally for the breach of warranty of authority.
32:35Rights of Third Parties
32:36Rights of Parties to a Contract Made by Undisclosed Agent Section 231
32:41If an agent makes a contract with a person who neither knows, nor has reason to suspect, that he is an agent, his principal may require the performance of the contract, but the other contracting party has, as against the principal, the same right as he would have had as against the agent if the agent had been the principal.
33:01If the principal discloses himself before the contract is completed, the other contracting party may refuse to fulfill the contract, if he can show that, if he had known who was the principal in the contract, or if he had known that the agent was not a principal, he would not have entered into the contract.
33:21Performance of Contract with Agent
33:23Supposed to be Principal Section 232
33:25Where one man makes a contract with another, neither knowing nor having reasonable ground to suspect that the other is an agent, the principal, if he requires the performance of the contract, can only obtain such performance subject to the rights and obligations subsisting between the agent and the other party to the contract.
33:45Option to third person sue the agent or the principal
33:48Right of Person Dealing with Agent Personally Liable Section 233
33:53In cases where the agent is personally liable, a person dealing with him may hold either him or his principal, or both of them, liable.
34:03Consequence of Inducing Agent or Principal to Act on Belief that Principal or Agent will be held exclusively liable
34:09Section 234
34:11When a person who has made a contract with an agent induces the agent to act upon the belief that the principal only will be held liable,
34:19or induces the principal, or induces the principal to act upon the belief that the agent only will be held liable,
34:24he cannot afterwards hold liable the agent or principal respectively.
34:29Revocation of Authority
34:30Termination of Agency Section 201
34:33Termination of Agency means putting an end to the legal relationship between principal and agent.
34:41Section 201 provides for the following modes of termination.
34:45Revocation
34:45An agency may be terminated by the principal revoking the authority of the agent.
34:52Principal may revoke the authority given to his agent at any time before the authority has been exercised so as to bind the principal Section 203.
35:01However, the principal cannot revoke the authority given to his agent after the authority has been partly exercised so far as regards such acts and obligations as arise for acts already done in the agency.
35:13Section 204
35:14Compensation for Revocation by Principle
35:18If there is premature revocation of agency without sufficient cause, the principal must compensate the agent, for such revocation.
35:29Notice of Revocation Section 206
35:31When the principal, having justification to do so, revokes the authority, he must give reasonable notice of such revocation to the agent, otherwise, he can be liable to pay compensation for any damage caused to the agent.
35:47Section 206
35:48Revocation and Renunciation may be expressed or implied
35:52Section 207
35:53Revocation of Agency may be expressed or implied in the conduct of the principal.
35:58Renunciation by Agent Section 206
36:02An agent may renounce the business of agency in the same manner in which the principal has the right of revocation.
36:09In the first place, if the agency is for a fixed period, the agent would have to compensate the principal for any premature renunciation without sufficient cause.
36:19Section 206
36:19Secondly, a reasonable notice of renunciation is necessary.
36:24Length of notice is to be determined by the same principles which apply to revocation by the principal.
36:31If the agent renounces without proper notice, he shall have to make good any damage thereby resulting to the principal.
36:39Section 206
36:40Completion of Business
36:42An agency is automatically and by operation of law terminated when its business is completed.
36:49Thus, for example, the authority of an agent appointed to sell goods ceases to be exercisable when the sale is completed.
36:58Death or Insanity
36:59An agency is determined automatically on the death or insanity of the principal or the agent.
37:04Winding up of a company or dissolution of partnership has the same effect.
37:10Act done by agent before death would remain binding.
37:14Principles Insolvency
37:15An agency ends on the principal being adjudicated insolvent.
37:20On expiry of time
37:22Where an agent has been appointed for a fixed term, the expiration of the term puts an end to the agency, whether the purpose of agency has been accomplished or not.
37:32An agency comes to an automatic end on expiry of its term.
37:37When the agency is irrevocable
37:39When the agent is personally interested in the subject matter of agency the agency becomes irrevocable.
37:46Section 202 states that where the agent has himself an interest in the property which forms the subject matter of the agency, the agency cannot, in the absence of an express contract, be terminated to the prejudice of such interest.
38:00Effects of Termination
38:02Section 208
38:03When termination of agent's authority takes effect as to agent, and as to third persons
38:09Section 208
38:10The termination of the authority of an agent does not, so far as regards the agent, take effect before it becomes known to him, or, so far as regards third persons, before it becomes known to them.
38:23Agent's duty on termination of agency by principles death or insanity
38:28Section 209
38:30When an agency is terminated by the principle dying or becoming of unsound mind, the agent is bound to take, on behalf of the representatives of his late principle, all reasonable steps for the protection and preservation of the interests entrusted to him.
38:46Termination of sub-agent's authority
38:48Section 210
38:49The termination of the authority of an agent causes the termination, subject to the rules herein contained regarding the termination of an agent's authority, of the authority of all sub-agents.
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