Agency: Business Law

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Business Law Tutorial 11
1. [ Refer notes - creation of agency ]

2. [ Refer notes - Duties of Agent to Principal ]

3. [ Refer notes - Duties of Principal to his Agent ]

4. 4 remedies available:

Principal may repudiate the contract - Section 168 Contracts Act, 1950 Principal may recover the bribe from agent - Section 169 Contracts Act, 1950 Principal may refuse to pay commission to Agent

Principal may dismiss agent for breach of duty

5. [ Refer notes - Termination of Agency ]

6. (a) 3 conditions:

It is impossible for the agent to get principal's instruction Agent's act is necessary to prevent loss to the principal with respect to the goods, for example, perishable goods Agent's necessity must have acted in good faith

6. (b) 9 conditions:

the act must be unauthorised
agent must expressly act as agent for principal. He must not allow the third party to think that he is principal. Agent must have a principal in actual existence when the contract is made principal has the contractual capacity to enter into the contract when the contract is made and at the time of ratification principal must have full knowledge of all material facts at the time of ratification - Section 151 Contracts Act, 1950 principal must ratify the whole contract - Section 152 Contracts Act, 1950 the ratification does not injure a third party - Section 153 & Illustration Contracts Act, 1950 ratification must done within a reasonable time, which is decided by the judges the unauthorised act must be legal.

7. Agency is defined in Section 135 Contracts Act, 1950 as a relationship which exists between s principal and the agent authorised to act for him or represent him in dealings with third parties.

(i) How can an agency be created? In this case, it is an express appointment by the Principal - Section 140 Contracts Act, 1950 because Abu appointed Batu as his agent. Therefore,Batu has actual authority to...
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