Page 136 - DMGT102_MERCANTILE_LAWS_I

Mercantile Laws-I

Notes 9.9 Summary

z In this unit you studied about law of agency. Agent is “a person employed to do any act for
another or to represent another in dealings with third person”.
z Thus, agent is a person who acts in place of another. The person for whom or on whose
behalf he acts is called the Principal.
z Contract of agency may be created by an express agreement or by implication (implied
agreement) or by ratifi cation.

z Thus, there are different kinds of agency. Implied agency arises from the conduct, situation
or relationship of parties.
z Implied agency, therefore, includes agency by estoppel, agency by holding out and agency
of necessity.
z The principal may, by notice, revoke the authority of the agent at any time. Where the agent
is appointed to do a single act, agency may be revoked any time before the commencement
of the act. In case of a continuous agency, notice of revocation is essential to the agent
as well as to the third parties who have acted on the agency with the knowledge of the
principal.
z Where agent is appointed to do a particular act, agency terminates when that act is done or
when the performance becomes impossible.

z Insolvency of the principal, not of the agent, terminates the agency.
z The termination of the authority of agent does not, so far as regard the agent, takes effect
before it becomes known to him.

z A power of attorney is defined by Sec.2(21) of the Stamp Act, as including “any instrument
not chargeable with a fee under the law relating to court fees for the time being in force,”

which empowers “a specified person to act for and in the name of the person executing
it”.

9.10 Keywords

Agency by Estoppel: Agency by estoppel arises where a person by his words or conduct third
persons to believe that a certain person is his agent.
Agency by Express Agreement: An agency by express agreement is created when by spoken or
written words an express authority is given to an agent.
Agent: A person employed to do any act for another or to represent another in dealings with third
person.
Auctioneer: An agent appointed to sell goods by auction.
Implied agency: It arises from the conduct, situation or relationship of parties.

Special agent: A person appointed to do some particular act or enter into some particular
contract.
Sub-agent: A sub-agent is a person employed by and acting under the control of the original
agent in the business of the agency.

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