BL notes.docx - Agency The Act attempts to define...

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Agency The Act attempts to define ‘agency’ in terms of agent and principal relationship. An agent is a person employed to do any act for another person, or to represent another in his dealings with third persons. The person for whom such an act is done or who is so represented is called the principal . (S 182) Thus, an agent acts as a connecting link between the principal and third parties . After enforcing the contract on behalf of the principal (i.e., the promisor) with a third party (i.e., the promisor) she/he ceases to be a party to the contract. General Rules Governing an Agency There are two important general rules regarding agency, namely, Whatever a man sui juris i.e., a person competent to contract may lawfully do by himself, s/he may do so by an agent. This means that, any person possessing the capacity to contract, may act through a representative i.e., an agent. However, the process cannot be adopted in the transactions or acts requiring personal skills and abilities. For example a person cannot enter into a contract of marriage through an agent. Similarly, no one can make a painting or carve a statue through an agent. Maxim “qui facit per alium facit per se” i.e., he who acts through an agent is himself acting. That is, for legal purposes, the acts of an agent are the acts of his principal. For example, A buys goods from B knowing that he is an agent for their sale, but not knowing who is the principal. B's principal is the person entitled to claim from A the price of the goods, and A cannot, in a suit by the principal, set off against that claim a debt due to himself from B. Essentials of Agency 1. Intention and Power to Act on Behalf of the Principal The mere fact that a person says that s/he is an agent does not make them one if they intend to act on their own behalf and not on behalf of their supposed principal. Therefore, to become an agent of another, a person must be intended , and adequately authorized to represent another so that s/he can render the person so represented answerable to a third person . Thus, a person who agrees in friendship to ferry another's car from one place to another can be regarded as the owner's agent, such that his negligent driving may make the owner liable in tort ; but a person who borrows another's car for his own purposes would not be so regarded. 2. Capacity of the Parties The first rule makes it clear that since an agent brings about a contractual relation between his/her principal (i.e., the promisor) and a third party (i.e., the promisee), it is essential that both the principal and the third party should be competent to contract . As per Section 183, ‘Any
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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.’ Thus, the agent need not have the capacity to contract since his/her act is deemed to be the act of their principal . According to Section 184, ‘As between the principal and third persons, any person may become an agent,
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  • Fall '18
  • terms of agent

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