An agent on behalf of the principal has the same legal worth as principal himself. He can create legal contracts with third parties and act as an agent too. Sometimes or Often, agents are being paid for their services in form of commission
Rights of Agent
Agent’s Lien
An agent is entitled to retain goods, papers and other property, whether movable or immovable, till the amount due to him for commission and disbursement etc in respect of the same has been paid.
Agent’s Right to Remuneration
The remuneration is generally specified in the agreement and may take the form of salary or commission or both.
Agent’s Right to an Indemnity
The agent may in the course of his duty incur liabilities or make payments of money for the principal, and he has a right to be indemnified against such liabilities and to recover any money paid.
Right of Compensation
He is entitled to be compensated by the principal in respect of injury caused to him by the principal’s neglect.
Right of Retaining
An agent has right to retain, out of any sums received an account of the principal in the business of the agency, all moneys due to himself in respect of advances made or expenses properly incurred by him in conducting such business, and also such remuneration as may be payable to him for acting as agent. (Sect. 217)
Right of Commission after rendering the Services
The commission is generally of the services but if “an agent who is guilty of misconduct in the business of the agency is not entitled to any remuneration in respect of that part of the business which he has misconducted”. (Sect. 217)
Duties of an Agent
Conducting Principal’s Business
An agent is bound to conduct the business of his principal according to the directions given by the principal, or in the custom which
Requirement of Skill and Diligence
The agent must carry out his work with ordinary skill and diligent. (Sect. 212)
Submission of Accounts
An agent is bound to render proper accounts to his principal on demand. (Sect. 213)
Communicating with his Principal
It is the duty of an agent, in cases of difficulty, to use all reasonable diligence in communicating with his principal, and in seeking to obtain his instructions. (Sect. 214)
Separation of Accounts
The agent has a duty to keep the principal’s property separate.
Payment of Sum
The agent is bound to pay to his principal all sums received on his account. (Sect. 218). Payments methods can be Bank Transfer, Credit Card Payments, Cash and others
In Compliance with Lawful Instructions
The agent is under a duty to obey the lawful instructions of his principal.
Undue Advantage
If the agent takes any secret profit or undue advantage or bribe, the principal has right to dismiss the agent without notice.
Fiduciary Duty Towards his Principal
The agent has a fiduciary duty towards his principal. The agent must not use his position for his personal benefit to the detriment of his principal, and he must not become a principal as against his employer.
Liabilities of an Agent
In case of payment by mistake or fraud
Where an agent receives money by mistake or fraud from third parties, he can be sued there fore.
In Case of Bill of Exchange
The general rule is that an agent is liable on a bill of exchange if the sign it without making it clear that he is signing on behalf of a named principal.
In Case of Foreign Principal
Where as agent acts for a foreign principal, the presumption is that credit has been given to agent and not to the foreign principal. He can therefore, himself sue and be sued on the contract.
In Case of Undisclosed Principal
The agent is also presumed to be intended to be personally liable where he acts for an “Undisclosed Principal”.
Third Party Insistence
Where the third party insists that the agent should accept the liability before he will make the contract. If the agent has a greed to do this, he will be liable
In case of Breach of Warranty
Where as agent exceeds his authority he is liable to the third party for breach of warranty of authority:
- i. if the third party does not know of the lack of authority; and
- ii. If the third party suffers loss as a result of this lack.
Liability for Dealing Person
In cases where the agent is personally liable, a person dealing with him may hold either him or his principal or both of them liable. (Sect. 233)
Liability of Pretended Agent
A person untruly representing himself to be the authorized agent of another, and thereby inducing a third person to deal with him as such agent, is liable, if his alleged employer does not ratify his acts, to make compensation to the other in respect of any loss or damage which he has incurred by so dealing. (Section 235)
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