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Section 194 - Relation between principal and person duly appointed by agent to act in business of agency, Section 195 - Agent's duty in naming such person : Indian Contract Act 1872

 

What is the Relation between principal and person duly appointed by agent to act in business of agency? What is Agent's duty in naming such person? Section 194 and 195 of Indian Contract Act 1872

Section 194 of Indian Contract Act 1872 : "Relation between principal and person duly appointed by agent to act in business of agency"

194. Where an agent, holding an express or implied authority to name another person to act for the principal in the business of the agency, has named another person accordingly, such person is not a sub-agent, but an agent of the principal for such part of the business of the agency as is entrusted to him.

Illustrations
(a) A directs B, his solicitor, to sell his estate by auction, and to employ an auctioneer for the purpose. B names C, an auctioneer, to conduct the sale. C is not a sub-agent, but is A's agent for the conduct of the sale.

(b) A authorizes B, a merchant in Calcutta, to recover the moneys due to A from C & Co. B instructs D, a solicitor, to take legal proceedings against C & Co. for the recovery of the money. D is not a sub-agent, but is solicitor for A.

Section 195 of Indian Contract Act 1872 : "Agent's duty in naming such person"

195. In selecting such agent for his principal, an agent is bound to exercise the same amount of discretion as a man of ordinary prudence would exercise in his own case; and, if he does this, he is not responsible to the principal for the acts or negligence of the agent so selected.

Illustrations
(a) A instructs B, a merchant, to buy a ship for him. B employs a ship surveyor of good reputation to choose a ship for A. The surveyor makes the choice negligently and the ship turns out to be unseaworthy and is lost. B is not, but the surveyor is, responsible to A.

(b) A consigns goods to B, a merchant, for sale. B, in due course, employs an auctioneer in good credit to sell the goods of A, and allows the auctioneer to receive the proceeds of the sale. The auctioneer afterwards becomes insolvent without having accounted for the proceeds. B is not responsible to A for the proceeds.

 

INDIAN CONTRACT ACT 1872

Section 186 - Agent's authority may be express or implied

Section 187 - Definitions of express and implied authority

Section 188 - Extent of agent's authority

Section 189 - Agent's authority in an emergency

Section 190 - When agent cannot delegate

 

 

Sub-agents

Section 191 - Sub-agent defined

Section 192 - Representation of principal by sub-agent properly appointed

Section 193 - Agent's responsibility for sub-agent appointed without authority

Section 194 - Relation between principal and person duly appointed by agent to act in business of agency

Section 195 - Agent's duty in naming such person

 

 

Ratification

Section 196 - Right of person as to acts done for him without his authority

Section 197 - Effect of ratification Ratification may be expressed or implied

Section 198 - Knowledge requisite for valid ratification

Section 199 - Effect of ratifying unauthorized act forming part of a transaction

Section 200 - Ratification of unauthorized act cannot injure third person

 

 

Revocation of Authority

Section 201 - Termination of agency

Section 202 - Termination of agency, where agent has an interest in subject-matter

Section 203 - When principal may revoke agent's authority

Section 204 - Revocation where authority has been partly exercised

Section 205 - Compensation for revocation by principal, or renunciation by agent

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