Page 55 - 01. Indian Contract Act, 1872

Law of Agency

Agency As per Sec 182, '`An agent is a person employed - (i) to do any act for another,
or (ii) to represent in dealing with third persons."

 Principal is a person for whom such act is done, or who is so represented.
 Agent acts as a mere connecting link between the principal and third party.
 It is based on two rules:
(i) A person can do through an agent, whatever he can do himself.
(ii) The acts of the agent are the acts of the principal.

Essential elements
(i) Two parties are required
(ii) Agreement between parties is necessary
(iii) No consideration is required.

True test of Agency
If a person has the capacity to bind the principal for the acts done by him, then agency
exists and such person is called an agent.

Modes of creation of Agency:

Modes of Creation of Agency

Express Agency Implied Agency Agency by Actual & Agency by
Apparent Authority Ratification

By Estoppel By Holding out By Necessity

 Sec 187: Express Agency
It is created either by words spoken or in writing
Eg- Power of Attorney ( it may be general or special)

 Implied Agency - Agency created by conduct of parties. It can be in the following
terms:

(a) Sec 237: Agency by Estoppel
It a person by his conduct, words spoken or written leads another to believe that a
certain person is acting as his agent, he is estopped later on from denying such
facts.

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