Page 119 - DCOM103_COMMERCIAL_LAW

Commercial Law

Notes 2. A consigns 100 bags of rice to B, who has made advances to him on such rice and desires
B to sell the rice and to repay himself out of the price, the amount of his own advance. The
authority of B is an authority coupled with interest.
3. A sells the goodwill and book debts of his business to B and appoints B as his agent to
collect the debt.
It should be noted that, it is not the ordinary type of interest which every agent has such as the
remuneration, but it is that special type of interest which agent possesses that makes it agency
coupled with interest. In the case of agency coupled with interest, the agency cannot, unless
there is an express contract, be terminated to the prejudice of such interest (S.202). It becomes
irrevocable to the extent of such interest and does not terminate even by the insanity or death of
the principal.

12.3 Classification of Agents

Agents may be classified from different points of view. One broad classification of agents is:

(i) mercantile or commercial agents and (ii) non-mercantile or non-commercial agents. Another

classification of agents is: (1) general and (2) special.
Special and General Agents

A special agent is a person appointed to do some particular act or enter into some particular
contract. A special agent, therefore, has only a limited authority to do the specified act. If he does

anything beyond the specified act, he runs the risk of being personally liable since the principal
may not ratify the same. A general agent, on the other hand, is one who is appointed to represent
the principal in all matters concerning a particular business, e.g., manager of a firm or managing

director of a company.
Mercantile or Commercial Agents

A mercantile or commercial agent may assume any of the following forms: broker, factor,
commission agent, del credere agent, auctioneer, banker, Pakka and Katcha Adatias and indentor.
A broker is a mercantile agent engaged to buy and/or sell property or to make bargains and
contracts between the engager and third party for a commission (called brokerage). A broker has
no possession of goods or property. He is merely a connecting link between the engager and a
third party. The usual method of dealing by a broker is to make entries of the terms of contract
in a book, called the memorandum book and to sign them. He then sends the particulars of the
same to both parties. The document sent to the seller is called the sold note and the one sent buyer
is called the bought note. A factor is a mercantile agent who is entrusted with the possession of
goods with an authority to sell the same. He can even sell the goods on credit and in his own
name. He is also authorised to raise money on their security. A factor has a general lien on the
goods in his possession. A factor, however, cannot barter the goods, unless expressly authorised
to do. Also, he cannot delegate his authority.
A commission agent is agent who is employed to buy or sell goods or transact business. The
remuneration that he gets for the purpose is called the commission. A commission agent is not
liable in case the third party fails to carry out the agreed obligation. A commission agent may
have possession of the goods or not. His lien in case of goods in his possession is a particular
lien. A del credere agent is one who, in consideration of an extra remuneration, called a del credere
commission, guarantees the performance of the contract by the other party. A del credere agent
thus occupies the position of a guarantor, as well as of agent. He is normally appointed in case of
deals with foreign nationals, about whom the principal may know nothing.

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