Agency is an area of commercial law dealing with contractual and non-contractual relationships which involve a person named Agent who is authorised to act for another person called Principal to create legal relationship with a third party. Agent’s main duty is to negotiate for principal and bring him and the third party in a contractual relationship. Under Section 182 of the Contract Act 1872 agent is a person employed to do any act for another in dealing with third persons. Any person who is a major and of sound mind can become an agent and has to be responsible to the principal as per the provisions of the Act. Authority of an agent can be express or implied. Express means authority given by words or in writing and implied means inferred from the circumstances of the case. Agent has full authority to do all things lawfully that is necessary to do such act. There are many commercial agents who have been recognised under Indian Law, i.e. Inter Alia Brokers, Auctioneers, Del credere Agents, Insurance Agents. Agent has to and is bound to render proper accounts to his principal.
A person is always liable for their own torts or wrongs and so an agent who commits a tort will also be liable if he is an undisclosed, partially disclosed, if agent lacks authority, or if agent enters into contract in person, and where trade and usages holds the agent himself liable in some kinds of business. If a person represents himself untruly as an agent of another inducing third person to deal with him without employer’s ratification then agent is liable personally. Any fraud or misrepresentation done in effect by an agreement through the agent without the knowledge of the principal then the principal will not be held liable but the agent himself. Where the agents acts for an undisclosed principal, where agent signs a negotiable instrument in his own name without informing that he is an agent. In Jitendrakumar Jayantilal Sheth Vs Life Insurance Corporation on (5 August, 2013) court has considered that an agent is merely soliciting business for and on behalf of respondent and so the foundation of relationship of agent and respondent is usually based on mutual faith and trust.
by Sushma Javare.