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Business Environment and Law-Performance And Discharge Of Contracts

Contract Of Agency-Performance And Discharge Of Contracts

   Posted On :  07.05.2018 11:26 pm

“An agent is a person employed to do any act for another or to represent another in dealing with third persons. The person for whom such act is done or who is so represented, is called the principal.”

Contract Of Agency

Definition Of Agent And Principal
 
(Sec. 182) “An agent is a person employed to do any act for another or to represent another in dealing with third persons. The person for whom such act is done or who is so represented, is called the principal.”
 
Test of Agency: The true test of agency is the authority that one person possesses to create contractual relationship between the person he is representing and the person to whom he represents. Where a person is in the habit of advising another in business dealings he does not become the agent of the other.
 

Agent and Servant

 
A servant is a person who acts under the direct control and supervision of his master while an agent does not. “A principal has the right to direct what the agent has to do; but a master has not only that right but also the right to say how it is to be done” An agent is, therefore, sometimes described as ‘Superior Servant’. An agent binds the principal with the third parties but a servant does not create relations between his master and third persons.
 

Who may employ agent?

 
(Sec. 183), “Any person who is of the age of majority according to the law to which he is subject, and who is of sound mind, may employ an agent.” “Whatever a person can do personally he can do through an agent.” Thus a guardian of a minor can appoint an agent for the minor.
 

Who may be an agent?

 
A minor or even a person of unsound mind can act as agents but they would not be responsible to the principal or to the third parties in cases where a person competent to contract would have been responsible.
 
Consideration for the contract of agency: (Sec. 185) “No consideration is necessary to create an agency.” Principal’s agreement to be represented by the agent is deemed to be sufficient detriment to support the promise by the agent to act as such and be liable to the principal for negligence.
 
 

 

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