How is an agency created?


0

An agency may be created in the following ways:

  1. By Express Authority: The authority of any agency may be expressed in words spoken or written. For example, a contract of agency can be written by means of power of attorney.
  2. By Implied Authority: The authority of an agent can be interred from the circumstances of the case.

 

Illustration: A living in Bombay, owns a shop in Madras and he occasionally visits it. B is managing the shop and is in the habit of ordering goods from C in the name of A for the purpose of the shop and of paying to them out of A’s funds with A’s knowledge. B has an implied authority from A to order goods from C in the name of A for the purpose of the shop.

 

  1. By Necessity: Sometimes, exigencies of circumstances require a man to act for another as an agent, though not appointed as such.

Illustration: A horse was sent by rail. The owner had not taken delivery of the same at the destination. So, the station master had to feed it. It was held that the station master had become an agent by necessity and was therefore entitled to recover the charges incurred by him.

 

  1. By Holding Out: Where a master usually sends his servant to pledge his credit for certain mangdfgfd he is bound by the acts of the servant for similar purposes though done without his consent.
  2. By Estoppel: When one man by words or conduct causes another to believe that some other person is his agent and that another person had acted on that belief, he would be stopped from denying the authority of that another person to act on his behalf.

Illustration: a tells B in the presence and within the hearing of P that he (A) is P’s agent and P does not contradict this statement B, on the faith of this statement, subsequently enters into a contract with A, taking him to be P’s agent. P is bound by that contract.

 

  1. By Ratification or Expost Eacto Agency : Section 196 of the Indian Contract Act lays down that where acts are done by one person on behalf of another, but without his knowledge of authority, he may elect to ratify or to disown such acts. If he ratifies them the same effects will follow as if they had been performed by his authority. Thus ratification relates back to the date of the original contract and binds the principal as if he has expressly authorized it.

Like it? Share with your friends!

0
BMS Team

We, at BMS.co.in, believe in sharing knowledge and giving quality information to our BMS students. We are here to provide and update you with every details required by you BMSites! If you want to join us, please mail to [email protected].

One Comment


Warning: Undefined array key "html5" in /home/bmsnewco/public_html/wp-content/plugins/facebook-comments-plugin/class-frontend.php on line 140

Facebook comments:

This Website Is For Sale. Email us an offer we cannot refuse on [email protected] :)

X
Choose A Format
Personality quiz
Series of questions that intends to reveal something about the personality
Trivia quiz
Series of questions with right and wrong answers that intends to check knowledge
Poll
Voting to make decisions or determine opinions
Story
Formatted Text with Embeds and Visuals
List
The Classic Internet Listicles
Countdown
The Classic Internet Countdowns
Open List
Submit your own item and vote up for the best submission
Ranked List
Upvote or downvote to decide the best list item
Meme
Upload your own images to make custom memes
Video
Youtube and Vimeo Embeds
Audio
Soundcloud or Mixcloud Embeds
Image
Photo or GIF
Gif
GIF format