Question 4. Classify and explain different types of agents.

Answer:

Classification of Agents:

Agents are classified in various ways according to the point of view adopted. From the viewpoint
of the authority they have, they can be classified as special agents, general agents and universal
agents. They are classified as mercantile or commercial agents and non-mercantile or non-
commercial agents. There are different various types of kind agents are as follows.

(a.) Sub-Agent:
Sub-agency denotes delegation of power by an agent to a person appointed by him
as sub-agent. Incidentally the agent himself is delegate of his principal. The principal is that ‘a
delegate cannot delegate’. According to this, a person to whom powers have been delegate cannot
delegate them to another. Section 190 of the Act. Contains this principle. Generally, an agent
cannot lawfully employ another to perform acts, which he has expressly. But, if by the ordinary
custom of trade, a sub-agent may be employed, the agent may to do so.
A sub-agent, according to section 191, is a person whom the original agent
employs in the business of the agency and who under the control of the original agent. Thus the
relation of the sub-agent to the original agent is, as between themselves, that of the agent and the
principal.

We shall now discuss the Impact of the appointment of a sub-agent from the following two angles:-

(i.) In case of proper appointment: The agent is responsible to the principal for the acts of the
sub-agent. Thus, a commission agent for the sale of goods who makes a proper employment
of a sub-agent for selling his principal’s goods is liable to the principal for the fraudulent
disposition of the goods by sub-agent within the course of his employment.
(ii.) In the case of appointment without authority: In term of Section 193, the principal is not
bound by the acts of the sub-agent, nor is the sub-agent liable to the principal. The agent is
the principal of the sub-agent both to the principal and the third party.

(b.) Substituted Agent:

Substituted agents are different from sub-agents. Section 194 provides that
substituted agents are not sub-agents but are in fact agents of the principal. Suppose an agent has
an implied authority to name another person to act for the principal in the business of the agency,
and he has named another person accordingly. In the circumstances, such a named person is not a
sub-agent he is an agent of the principal for such part of the business of the agency as has been
entrusted to him.

For Example: A directs B who is a solicitor to sell his estate by auction and to employ an
auctioneer for the purpose. B names C, an auctioneer, to conduct the sale. In such a situation, C is
not sub-agent, but is A’s agent for the sale.

(c.) Special Agents:

A special agent is also known as a specific or particular agent. Such agent
appointed to perform a particular work or to represents his principal in particular transaction only.
As soon as the said period lapses, the agency stands terminated. Specific agents have a limited
authority and as soon as the entrusted to him is performed, his authority also comes to an end. A
special agent cannot bind his principal in any act other than for which he is specially appointed. If
he dose anything outside his authority, his principal cannot be bound by it. The third parties that
deal with a special agent must ascertain the extent of the authority he has.

(d.) General agents:

This type of agents has a general authority to do everything in the
course of his agency and he has to perform all the acts in the interest of his principal. Thus, a
general agent is one that ahs authority to do all acts connected with the business of his principal. A
manager of a branch shop of a firm or a commission agent is instances of general agents. General
agents have an implied authority to bind his principal by doing various acts necessary for carrying
on the business of his principal. Sufficiently wide powers are vested in him to affect the business
deals, enter into trade bargains, to make purchases and also payments of the purchases, to receive
money on behalf of his principal.

(e.) Universal Agent:

A universal agent has a universal or an unlimited power to act on
behalf of his principal. A universal agent is one whose authority is unlimited and who can do any
act on behalf of his principal provide such act is legal and is agreeable to the law of land. A
universal agent is practically substituted for his principal for all those transactions wherein his
principal cannot participate.

For Example: When a person leaves his country for a long time, he may appoint his son, wife or
friend as his universal agent to act on his behalf in his absence.

(f.) Co-Agents:
When a principal appoints two or more persons a agents jointly or severally,
such agents are known as co-agents. Their authority is joint when nothing is mentioned about the
exercise of their authority. It implies that all co-agents concur in the exercise of their authority
unless their authority is fixed. But when their authority is several, any one of the co-agents can act
without the concurrence of other.

(f.) Auctioneers:
An auctioneers is a mercantile agent who is appointed to sell goods on
behalf of the principal i.e., seller and for this function, an auctioneer get a reward in the form of a
commission. An auctioneer conducts auction on behalf of a seller, as he is primarily the agent of
the seller. However, after the sale, he also becomes of the purchaser who gives the highest bid. An
auctioneer has no authority to self-the goods of his principal by private contract or contracts.

Besides the above mentioned agents, there are other types of agents also such as brokers, bankers,
clearing agents, forwarding agents, underwriter, estate agents, etc. They also play an important role
and perform various functions for and on behalf of their principals.