Scope and Extent of Agent’s Authority Special Contracts

All that a person can do as an agent, on behalf of his principal, depends on the terms expressed
in his appointment, or is implied by the circumstances of the particular case. People dealing
with an agent are entitled to presume that he has the authority to do all such acts as are neces- Notes
sary or incidental to such business. The scope and extent of an agent’s authority is determined
by the following two principles:
(i) Agent’s authority in normal circumstances [Section 188]
(ii) Agent’s authority in an emergency [Section 189].

Agent’s authority in normal circumstances

An agent, having an authority to do an act, has the authority to do every lawful thing, which is
necessary in order to do such an act.
An agent having an authority to carry on a business has the authority to do every lawful
thing necessary for the purpose, or to do what is generally done in the course of conducting
such business [Section 188].
However, the custom or usage must not be unreasonable or unlawful. Whether a custom or usage
is unreasonable or unlawful is a question of law. Any custom that changes the very nature of the
agency, as for example, which converts the agent into principal, is unreasonable [Dr Avtar Singh10].
For example, B, who is based in London, employs A to recover a debt in Mumbai due to him. A
may adopt any legal process necessary for the purpose and may give a valid discharge for the same.

Agent’s authority in an emergency

In an emergency, an agent has the authority to do all such acts for the purpose of protecting his/
her principal from incurring loss as would be done by a person of ordinary prudence, in his/her own
case, under similar circumstances [Section 189]. For example, A consigns provisions to B at Kolkata,
with directions to send them immediately to C at Cuttack. B may sell the provisions at Kolkata, if
they will not bear the journey to Cuttack without perishing. Similarly, an agent for the purpose of
sale may buy goods if it were necessary.

Delegation of Authority by an Agent

Incidentally, the agent himself is a delegate of his/her principal. He/she, therefore, cannot further
delegate except with the permission of the principal. Section 190 provides that ‘an agent cannot
lawfully employ another to perform an act which he has expressly or impliedly undertaken to per-
form 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’.
The above provision is based on the Latin Maxim, ‘delegates non protest delegare’ that is, a delegate
cannot further delegate. In plain words, one cannot depute another to perform what he has himself
undertaken to perform. An agent occupies a fiduciary position, which means the principal has got the
full confidence in his integrity and competence. Accordingly, he is not supposed to delegate further
or involve someone else (i.e., appoint a sub-agent) while acting on behalf of his principal without
obtaining his permission. This general rule is, however, subject to the following exceptions:
1. Where the principal knows that the agent intends to appoint a sub-agent but does not object
to it.
2. Where by the ordinary custom of trade, a sub-agent may be employed.
3. Where the duties of the agent do not involve any skill or exercise of discretion, e.g., clerical
or routine task.
4. Where the very nature of agency requires delegation. For instance, a managing director may
appoint someone as his personal secretary.
5. When an emergency makes it necessary to appoint some sub-agent(s).

Sub-agent
Where an agent having authority to delegate further appoints another person to act in the Self-Learning
matter of the agency, the person so appointed is called a ‘sub-agent’, provided he/she acts un- Material  109