Meaning and Definition of Agency 

        Agency is the Legal relationship between an Agent and Principal. In a contract of Agency, a person appoints another person to act on his behalf with a third party. The person who appoints another person is called 'Principal' and the person, who is appointed is called 'Agent'

       For example, 'A' appoints 'B' to buy 50 bags of Wheat on his behalf, Here 'A' is Principal and 'B' is Agent. The relation between 'A' and 'B' is called Agency.

Agent : 
            An “agent” is a person employed to do any act for another or to represent another in dealing with third persons. (See... Rights and Duties of Agent )

  Principal :

           The person for whom such act is done, or who is so represented, is called the “principal”. 

Kinds of Agents

     On the point of view of the extent of their authority and the nature of the work performed by them  agents may be Classified under the following heads : -

1)Universal Agent :

                  A Universal agent is one who is authorised to do all the acts which the Principal can lawfully do and can delegate.

2) Special Agent:

                  A Special Agent is one who is employed to do some particular act or represent his Principal in some particular transactions.

for example,  An agent employed to sell a Bike. If the special agent does anything outside his authority, the principal is not bound by it and third parties are not entitled to assume that the agent has unlimited powers.

3) General Agent:

                 A General Agent is one was employed to do all acts connected with particular business or employment.

For example, A manager of a firm. He can bind the principal by doing anything which Falls within the ordinary scope of that business. Whether he is actually authorised for any particular act or not, is immaterial provided that third party acts bona fide.

4) De Credere Agent:

              He is one who in consideration of an extra commission guarantee his Principal that the third person with whom he enters into contracts on behalf of the principal shall perform their financial obligations that is, if the buyer does not pay, he will pay. Thus he occupies the position of a surety it as well as an Agent. He is not answerable to his principle for the failure of the third person to perform the contract. A del credere agent constituted an exception to this rule.

5) Pakka Adatia And Kaccha Adatia

                Pakka Adatia is an agent of his constituent only up to a certain point only for the purpose of ascertaining and giving a correct quotation of the price. But thereafter when the transaction takes place, he cease to be an agent and assumes towards his constituent the character of a Principal, and the transaction must be regarded as a contract between Principal and Principal.

6) Broker :

               He is one who is employed to make contracts for the purchase and sale of goods. He is not entrusted with the possession of goods. He simply act as a connecting link and bring it to parties together to bargain and if the circumstances materialise he becomes entitled to his commission called brokerage. He makes a contract in the name of his Principal. Thus, a broker is an agent primarily employed to negotiable a contract between two parties where he is a broker for sale he has no position of the goods to be sold.

7) Factor :

               A factor is a mercantile agent to home goods are entrusted for sale. He enjoys Wide discretionary powers in relation to the sale of goods. A Factor is an agent who is entrusted with the possession and contract of the goods to be said by him for his Principal.

           He has possession of the goods, authority to sell them in his own name and a general discretion as to this sale. He may sale on the usual term of credit may receive the price and give a good discharge to the buyer.

8) Commission Agent:

          Commission Agent is a mercantile Agent who buys or sells goods for his Principal on the best possible terms in his own name and who receives Commission for his labours. He may have possession of course or not.

9) Auctioneers : 

             An auctioneer is an agent to sell property at a public auction. He is primary an agent for the seller, but upon the property being knocked down he becomes also the agent of the buyer. He is mercantile agent within the meaning of Section 2(9) of the Sale of goods Act.   

See also : 

1) The Capacity of Person Who may employ an Agent

2) Who is Minor ? Effects of Minor's Agreement.

3) Difference between General Lien and Particular Lien

4) Difference between Sub-Agent and Substituted-Agent

5) Difference between Sub Agent and Co-Agent/ Substituted agent


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