Define Agency. Duties and rights of agents.
Introduction
Such a source which creates a relationship between principal and an agent is called agency. And the principal grants authority to the agent and the agent acts on the behalf of the principal. Both the agent and principal can be an individual or an entity, such as a corporation etc. Agent has no his own authority and he can be terminated by principal at any stage. Agent is such person who creates a legal relationship between the principal and the third party
Definition of Agency
Such source which creates relationship between principal and an agent is called agency
Parties to agency
Following are the two parties in the contract of agency
Agent
A representative of an agency who acts on the behalf of another person (Principal) in order to legally bind the third party in particular business
Principal
Principal is a such person who is being represented before the third party by the agent
Appointment of agent
Every person can be appointed as an agent who has attained the age of majority according to the law and is of sound mind.
Who can be agent
Between the principal and third person, any person can become an agent. But no person who has not attained the age of majority according to law and is not of sound mind, cannot become an agent.
Kinds of Agent
Sub-Agent
Sub agent is a person who is acting under the control of original agent and is working on the behalf of original agent
Co-agent
Co-agents are persons who are working together with one another on behalf of principal are called co-agent
Advocate
Advocate is a person who acts as an agent. He appears on the behalf of principal before the court
Banker
Banker is a person who acts like an agent on behalf of bank. The relationship between banker and customer is a legal relation
Broker
Broker is a person who acts like an agent on the behalf of principal. He employed for buying or selling the goods between the two parties
Auctioneer
An auctioneer is a person who acts like an agent on the behalf of principal and he is authorized to sell goods on the highest price during the public sale
Mercantile agent
A mercantile agent is a person who acts on the behalf of principal and is authorized to sell or buy goods, and collect a loan by using the principal's goods
Del Credere Agent
Del Credere agent is an agent who guarantees to his principal that the person to whom he sells will pay, if he will not pay, I will be liable
Factor
A factor is an agent whom goods have been given for sale
Indenter
An indenter is an agent who sells or buys on the behalf of his principal
Kinds according to extent of authority
Following are the kinds of an agent according to extent of authority
General agent
A general agent is a person who is authorized to do all acts in connection with a particular business. To whom third party can assume that this is a person who has all power to do all acts
Special agent
Special agent is a person who is authorized to do some particular acts in connection with a particular business. He represents his principal in some particular business
Universal agent
Universal agent is a person who is authorized to do all act and he has unlimited powers which have been given by his principal
Rights of Agent
Right of Wage
Agent has the right to give lawful charges to him for providing services against the contract of agency
Right of possession
Agent has right to keep the possession of the property of the principal until that principal pays lawful charges to the agent
Right of commission
Agent has right of commission upon the thing which is under his possession
Right of compensation
Agent has right to receive compensation from the principal for any loss during the completion of the purpose
Right of security
Agent has right to receive the amount of security from principal for any loss likely to be possible
Right of expenses
Agent has right to recover all the expenses which has been expensed during the completion of the purpose
Right of stoppage
Agent has right to stop the process of delivery of goods
Duties of an agent
Following are the duties of an agent
Obey the instructions
It is the duty of an agent to obey the instructions of the principal otherwise he will be held responsible for any loss
Use of skills and knowledge
It is the duty of an agent to use his skills and knowledge for furtherance of the business of the principal
Should not make any secret profit
It is the duty of an agent that he should not make any secret profit from the business of principal
Return of profit
It is the duty of an agent that if he earned the profit from the business he should return it to principal
Payment of all sums
It is the duty of an agent to pay all amounts received on his amount from the business of principal
Showing of accounts
It is the duty of an agent to show his account on the demand of the principal
Separate accounts
It is the duty of an agent to maintain his accounts and keep them separate from principal accounts and not to mix them
Duty in case of principal die or become insane
It is the duty of an agent in case of death or insanity of the principal that he should protect the interests of his legal heirs
Delegation of authority
It is the duty of an agent that he should not delegate his authority to any other person without the consent of the principal
Communicate with principal
It is the duty of an agent to communicate with principal and share all the information with him related to matters of business
Performance with honesty
It is the duty of an agent that he should deal with the business honestly. If he deals the business dishonestly then he is not entitled to receive the wage of his services
Conducting business
It is the duty of an agent to conduct the business of principal
Termination of authority of agent
Following are the ways by which authority of an agent gets terminated
- In case of death of principal
- In case of death of agent
- In case of insanity of principal
- In case of insanity of agent
- If agent gives up of the business
- In principal becomes bankrupt
- In case of destruction of the subject matter of the business
- In case of expiry of the time
Conclusion
An agent is authorized to create a contract between the third party and principal and he plays his role as middle person in the contract of the agency. Agents act on the behalf of the principal and his authority can be terminated by the principal at any stage or any time without any reason because all powers are vested in principal. Actually agent has no powers but there are a different kinds of agents according to their authorities