agency

Under the Contract Act, an agent is a person employed to do any act for another or to represent another in dealings with third persons, and the person for whom he acts is the principal. The key feature is the agent's power to create legal relations between the principal and third parties.

Agency may be created expressly, by implication, by necessity, by estoppel (holding out) or by later ratification. No consideration is needed. The principal is bound by acts within the agent's actual or ostensible authority. As a rule the agent is not personally liable on contracts made for a disclosed principal. Agency differs from employment and from sale: a dealer who buys and resells on his own account is not an agent even if called one.

Example

Because the company had allowed its manager to sign purchase orders for years, it was bound by his order to the supplier under the law of agency by holding out.

In Indian law

• Section 182, Indian Contract Act, 1872 (agent and principal defined)
• Section 196, Indian Contract Act, 1872 (ratification)
• Section 230, Indian Contract Act, 1872 (agent not personally liable)

See also

ratification · power of attorney · qui facit per alium facit per se · contract

Read more in the study notes

• Excessive delegation, conditional legislation and sub-delegation (Administrative Law)
• Control of delegated legislation: parliamentary, procedural and judicial (Administrative Law)
• Audi alteram partem: the right to a fair hearing (Administrative Law)
• Public corporations and public undertakings: status, classification, liability and control (Administrative Law)
• Central Vigilance Commission, parliamentary committees and commissions of inquiry (Administrative Law)
• Arbitrators: qualities, appointment, challenge and substitution (Alternative Dispute Resolution Systems)