Creation of Agency

1. Agency by Express Agreement

2. Agency by implied Agreement
a. Agency by estoppels.
b. Agency by holding out.
c. Agency by necessity.
3. Agency by ratification
Essentials of a valid ratification:
a. The agent must purport to act as agent for a principal who is in contemplation.
b. There should be an act capable of ratification.
c. The principal must be in existence.
d. The principal must be competent to contract.
e. The principal must have full knowledge of material facts.
f. Whole transaction must be ratified.
g. Within reasonable time.
h. Ratification must not injure a third party.

Extent of Agent’s authority:

a. Actual authority
b. Ostensible or apparent authority.
c. Authority in emergency.

Sub-agent
“A sub-agent is a person employed by, and acting under the control of, the original agent in the businesses of the
agency.”

Consequences of appointment of sub-agent:

a. The principal is bound and liable to third parties for the acts of the sub-agent, as if he were an agent
originally appointed by the principal.
b. The agent is responsible to the principal for the act of the subagent.
c. The subagent is responsible for his acts to the agent and not to the principal.

Duties of Agent:
1. Duty to follow principal’s directions or customs.
2. Duty to carry out the work with reasonable skill and diligence.
3. Duty to render accounts.
4. Duty to communicate.
5. Duty not to deal on his own account.
6. Duty not to make any profit out of his agency except his remuneration.
7. Duty on termination of agency by principal’s death or insanity.
8. Duty not to delegate authority.

Rights of Agent:
1. Right to receive remuneration.
2. Right of retainer.
3. Right of lien.
4. Right to be indemnified against consequences of lawful acts.
5. Right to be indemnified against consequences of acts done in good faith.
6. Right to compensation.
7. Right of stoppage of goods in transit.
 Principal’s liability for the Acts of the Agent:
The extent of the Principal’s liability to third parties for the acts of the agent is determined by the following rules:

1. When the agent acts within the scope of his actual and apparent authority.
2. When the agent exceeds his actual as well as apparent authority.
3. Liability for agent’s misrepresentation or fraud.
4. Notice given to agent as notice to principal.
5. Liability based on the doctrine of estoppels.

Personal liability of the agent to Third Party:

An agent is presumed to be personally liable, unless a contract to the contrary exists, in the following cases:
1. Where the agent expressly agrees.
2. where the agent acts for a foreign principal.
3. where the agent acts for an unnamed principal.
4. where the agent acts for an undisclosed principal.
5. where the agent acts for a principal who cannot be sued.
6. where the agent exceeds his authority.
7. where there is a trade usage or custom.
8. where agent’s authority is coupled with interest.

Termination of Agency:

1. Termination by the Act of the parties:

a. Agreement.
b. Revocation by the principal.
c. Renunciation by the agent.

2. Termination by operation of the Law

An agency comes to an end automatically by operation of the law in the following cases:
a. Completion of the business of agency.
b. Expiry of time.
c. Death of the principal or agent.
d. Insanity of the principal or agent.
e. Insolvency of the principal.
f. Destruction of the subject matter.
g. Dissolution of a company.
h. Principal or agent alien enemy.

Contract of Sale of Goods

A contract whereby the seller transfers or agrees to transfer the property in goods to the buyer for a price.

Essential features of a contract of sale:

1. Two parties
2. Transfer of property.
3. Goods.
4. Price.
5. Includes both ‘sale’ and ‘agreement to sale’
6. No formalities to be observed.
Sale
Where under a contract of sale the property in the goods is immediately transferred at the time of making the contract
from the seller to the buyer, the contract is called a sale. It refers to an absolute sale, e.g. an outright sale on a counter I a
shop.

An agreement to sale
Where under a contract of sale the property in the goods is to take place at a future time or subject to some condition
thereafter to be fulfilled, the contract is called “an agreement to sale”. It is an executory contract and refers to a
conditional sale.

Distinction between ‘sale’ and ‘agreement to sale’

Points of distinction.
1. Transfer of property (ownership).
2. Risk of loss.
3. Consequences of berach.
4. Right of resale.
5. Insolvency of buyer before he pays for the goods.
6. Insolvency of seller if the buyer has already paid the price.