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Home > Business Laws - CS > Indian Contract Act 1872 > Rights and Duties of Agents
EXAMS
Indian Contract Act 1872
Rights
and Duties of Agents
ASK
In a contract of agency, the principal appoints an agent to perform some
CONCEPTS
specific task or business on his behalf. The principal is bound by the acts of
his agent and is thus, responsible for his acts to the third parties. Let us now
understand the Rights and Duties of Agents.
Table of content
1 Rights and Duties of Agents
1.1 Rights of agents
1.1.1 1. Right to Remuneration
1.1.2 2. Lien on Goods
1.1.3 3. Right to be Indemnified
1.2 Duties of agents
1.3 Exceptions to the principle of Delegates non-protest delegate
2 Solved Example on Rights and Duties of Agents
Rights and Duties of Agents
Rights of agents
1. Right to Remuneration
As per section 219, an agent has a right to receive the agreed remuneration
or in absence of agreement, a reasonable remuneration for rendering the
services to the principal that are not voluntary or gratuitous. He becomes
eligible to receive the remuneration as soon as he completes the work that
he undertook.
2. Lien on Goods
Some agents who have the possession of goods, securities or properties of
their principal also have a lien on these goods, securities or properties
regarding their remuneration and also for any expenses or liabilities that
they incur. When he is an unpaid seller, he has a right to stop the goods in
transit.
3. Right to be Indemnified
An agent represents his principal to the third parties. As per sections 222
and 223, an agent has a right to be indemnified by his principal for all
charges, expenses, and liabilities that he incurs during the course of the
agency.
Duties of agents
A principal has a right to sue his agent for damages in case of breach of
duty by the agent. The duties of agents are:
1. As per section 211, an agent shall act within the scope of authority
that his principal confers upon him. Also, he shall strictly follow the
directions of his principal. However, in the absence of express
instructions from his principal, he shall follow the custom
prevailing at the place where he carries out his business, in a similar
type of business.
2. Section 212 states that he shall work with reasonable skill and
diligence. Also, where the nature of the agent’s profession requires
him to possess a special skill, he shall exercise the skill that a
member of that profession will exercise.
3. An agent shall disclose properly any material information to his
knowledge to the principal that can influence the making of the
contract.
4. As per section 213, an agent shall is under the duty not to disclose
any confidential information of his principal.
5. Section 215 states that an agent shall not compete with his principal.
In other words, his interest shall not conflict with his duty.
6. It is the duty of the agent to keep true and fair accounts and prepare
them on a reasonable notice to render them.
7. An agent shall not make any secret profit and shall disclose any
extra profit he makes to the principal. Where the principal finds
that the agent is making secret profits, he may dismiss the agent
without notice, recover the amount of profit and also refuse to pay
him his remuneration. He may also repudiate a contract where a
third party is also involved in the fraud and recover the damages.
8. He shall not appoint a sub-agent.
Source: freepik.com
Exceptions to the principle of Delegates non-protest delegate
The above principle means that a delegate cannot further delegate.
Therefore, an agent cannot appoint a sub-agent. However, there are the
following exceptions to this principle:
1. When the principal allows delegation.
2. Where it is the custom or usage of trade to delegate.
3. When delegation is necessary for proper and efficient performance.
4. Where it becomes essential due to some emergency
5. When the principal knows that the agent’s intention is to delegate.
6. Where the work is ministerial.
Solved Example on Rights and Duties of Agents
What is the extent of an agent’s authority?
Ans.
The extent of an agent’s authority depends on the terms of the agent’s
appointment or the circumstances of the case. The contractual authority of
an agent is the real authority. But, implied authority means all that is
incidental to carry out the contractual authority. Thus, implied authority is
the apparent or ostensible authority. Hence, an agent who has an authority
to do a certain act also has the authority to do all that is lawful to perform
this act. Also, an agent has an authority to do anything that prevents the
principal from any loss or damages.
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B RO W S E
Indian Contract Act 1872
Contract of Indemnity
Agreement with Minor
Responsibilities of Principal to Third-parties
Rights and Discharge of Surety
Termination of Agency
Contract of Guarantee
Contract of Bailment and Pledge
Duties of Bailee and Bailor
Rights of Pawnee and Pawnor
Rights and Duties of Agents
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B RO W S E
Indian Contract Act 1872
Contract of Indemnity
Agreement with Minor
Rights and Duties of Agents
Responsibilities of Principal to Third-parties
Contract of Guarantee
Rights and Discharge of Surety
Contract of Bailment and Pledge
Termination of Agency
Duties of Bailee and Bailor
Rights of Pawnee and Pawnor
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