Kinds and creation of an agency

Kinds of agent

Factor: A commercial agent who receives goods for the purpose of sale in the ordinary course of business is a factor.

Broker: Mercantile agent is appointed to make a contract for sale or purchase of a property. He will not be given the possession of the goods.

Del credit agent: Its a kind of mercantile agent. He is responsible to the principal for the failure of 3rd party if that party fails to perform the contract. He is entitled to extra commission. That commission is called as del credit commission

Hastie vs courtier

In this case, the defendant was a del creder agent, and he worked as an agent under the plaintiff to sell goods belonging to the plaintiff. The goods that the plaintiff was about sell was on voyage So meanwhile, the agent entered into a contract with the 3rd party. The fact that the agent was aware while entering into a contract on behalf of the plaintiff was that the goods were already sold by the captain in the ship. Because the goods were creating heat in the ship so for a safer reason the captain had to sell the goods. When the 3rd party with whom the agent has signed an agreement came to know this the buyer repudiated the contract. A defendant is liable because buyer cancelled the contract so the agent will be liable as he represents his master in the contract, that’s the difference between a del creder agent and a normal agent, the del creder agent is solely liable for the default on the part the 3rd party.

Creation of agency

Relationship of the principal and agent or creation of agency can be made in the following ways :

• By express appointment

Any person who is competent to the contract may appoint another person as an agent through express appointment either in writing or oral. As per English law, the consent of the person is required for express appointment. An only principal should appoint an agent. Indian law is wider than that of English law.

• By necessities

Once the contract is created there is a limitation on the part of the agent. He cannot exercise all the things on the part of the principal.

 What if an agent exceeds his power?

If he is authorised only till 50,000 and if he exceeds then he is personally liable for exceeding the amount.

• Conditions to be fulfilled for the person to be considered as the agent by necessity

1. The person should be unable to communicate with the principal
2. Act of an agent or a person should be reasonable
3. Act of the agent must be bonafide with the interest of all the parties

• By ratification

It is a kind of consent given to an unauthorised act done by any person. Once ratification is given then transaction becomes valid one and principal becomes liable. An agent does any act without obtaining the permission from the principal debtor, then principal has an option whether to agree the contract or the principal can deny as well, If the principal gives consent then it is ratification.