AGENCY

1. SECTION 182-238
2. CASES
 Lakshminarayan Ram Gopal v. Gov’t of Hyderabad
 Harshad Shah v. LIC
 Kelly v. Cooper
 National Bank of Lahore v. Sohanlal,
 State Bank of India v. Shyama Devi

AGENCY APPOINTMENT AND AUTHORITY OF AGENTS (182-189)

182- Agent is a person who represents/acts on behalf of and for principal in dealing with
third persons.

183- Principal must be of sound mind and of the age of majority

184- Agent must be of sound mind and of the age of majority to be held responsible for the
principal

185- no consideration necessary

186- authority of agent must be expressed or implied

187- def of express or implied

188- an authorized agent has the authority to do every lawful thing necessary in order to do
such act (facts of the case)

189- in cases of emergency, agent can carry out actions to protect principal from any kind of
loss (reasonable man)

SUB AGENTS (190-195)

190- Agent cannot employ a sub agents but except in two cases. 1. Ordinary custom of trade
2. nature of agency

191- (def of sub agent)- employed by and acting under the control of agent

192- Principal’s responsibility – if sub agent properly appointed, principal is responsible for
his acts as if they were of the original agent.
Agents responsibility- agent is responsible to the principal for the acts of the sub agent
Sub agents responsibility- responsible to agent and not to principal except for in the cases of
fraud or willful wrong.

193- Agent is responsible for the acts of a sub agent who is appointed him without the
authority to do so, to the principal and the third person.

194- if an agent holds the authority to appoint a person to act on behalf of principal then
that person becomes the agent itself and not sub agent

195- agent in order to not be responsible for the acts of negligence of the other gaent has to
select someone of ordinary prudence. (reasonability and facts)

RATIFICATON (196-200)

196- if principal ratifies act (done by agent without his knowledge or authority) the same
affect will follow as if they had been perfomed under his authority.
197- it may be expressed or implied

198- no ratification if a person whose knowledge of the facts of the case is incomplete or
defective.

199- ratification of entire transaction occurs when a person ratifies any unauthorized act
(part of ratification)

200-

REVOCATION OF AUTHORITY (201-210)

201- For an agency to be terminated:-

1. Principal revoking his authority
2. Agent renouncing the business of agency
3. Business of agency being completed
4. Either principal or agent dying or becoming of an unsound mind

202- an agency cannot be terminated to the prejudice of the interest of the agent in the
property which forms the subject matter of the agency

203- Principal may revoke the authority given to his agent at any time before its exercised

204- Principal cannot revoke the authority after it is partly exercised.

So far as regards such acts and obligations as arise from acts alreafy done in the agency.
(illustartions)
205- If time is specified for the agency (express or implied), the principal or the agent shoud
make compensation to the agent or the principal as the case may be. For revocation or
renunciation before the specified time and without any specific cause.

206- reasonable notice must be given or else the damges must be made good to the one by
the other

207- may be express or implied

208- termination of authority of agent does not take effect

1. In case of agents before it becomes known to him
2. In case of third persons before it becomes known to them

209- if agency is terminated by principal dying or becoming of unsound mind , agent is

bound to take all reasonable steps for the protection of interests entrusted to him (on
behalf of representatives of the late principal )

210- termination of authority of agent leads to termnation of authority of all sub agents
appointed by him

231- once the principal is disclosed, the third party can say no. Six elements:-
1. Third party does not know that he is dealing directly with an agent
2. Even if he doesn’t know, principal is liable
3. Principal is not known
4. If principal is known, cancellation by third party
5. had the third party been aware of who the principal is, he wouldn’t have contracted
in the first place
6. agent enters as if he were the principal. principal contracting is the same as agent
contracting.

232- principals liability to third party supersedes his liability to an agent. It is equal however
third partys right against the agent supersedes its right against the principal. to make the
Third party right supersedes principal right, principal cannot ask the third party to pay the
extra 500

233-third party assumes the agent to be principal. (one to one) . A is the agent, b is the third
party, c is the principal. A and c contracting, first sue will be A

234- inducement and personal liability. When agent can also be held personally liable
Indumenta by third person to principal or agent.

235- if by misrepresentation, an agent transacts with athird party and therefore inducing
the third party to comtract with him, is liable if the principal does nit ratify his acts. 4
 1. when agent is misrepresenting himself
2. third party believes him to be the agent and enters
3. principal becomes aware that agency inducement has happened
4. misrepresenting agent becomes personally liable
5.
236- agent pretending to be an agent cannot ask the third party to act