Law of Agency

Topics: Contract law, Acts of the Apostles, Agent Pages: 3 (586 words) Published: December 9, 2014
Law of Agency

WHAT IS AN AGENCY?
Sec 135 of Contract Act, agency is the relationships which subsists between the principal and the agent who has been authorized to act for him or represent him in dealings with others.

WHO CAN BECAME A PRINCIPAL OR AGENT?
Any person who is 18 years old and above and who is of sound mind may be principal. As between the principal and third persons, any person can became an agent. BUT persons of unsound mind and who are below 18 years are not liable towards their principal for acts done by them as agents. CREATION OF AGENCY

1) Express Appointment

This happen when the principal expressly appoint a person to be his agent. This can be done in 2 ways : 1. Oral
2. In writing
2) Implied Appointment

This happen when a person, by his word or contract holds out another person as having to act for him.

3) Ratification

Sec 149 : Where acts are done by one person B (agent) on behalf of another A (Principal) but without his A knowledge or authority, he A may elect to ratify or to disown the acts.

Agency by ratification can happen only if it falls under 2 situations : 1. Agent who has been appointed but has exceeded his authority when he entered into a contract with third party. 2. A person who has no authority to act for the principal but he acted as if he has the authority to enter into a contract with third party.   When he accept the contract, it is known as "ratification"

4) Agency by Necessity

Sec 142, a person may become an agent although he was not appointed. When this situation happen, that person known as agent by necessity. It can created by fulling these 3 conditions : 1. It is impossible to get the principal's instructions.

2. The agent's action is necessary to prevent loss to the principal. This happen when the principal put the agent to be in change if the goods. 3. The agent had acted in a good faith.
5) Agency by Estoppel

Sec 190 :
1. It happen when the principal allows a third party to...
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