Various Kinds of Agents and their powers

There are eleven kinds of agents:-

1. Special Agent:- A special agent is one who has been authorised to do a single act, e.g. a broker employed to self a particular house.

2. General Agent:- A general agent is one who is authorised to do all acts connected with a particular trade, business, or employment, e.g., the manager of a firm whose authority extends to the doing of everything necessary for carrying on the business of the firm.

3. Sub-Agent:- A sub-agent is a person employed by, and acting under control of, the original agent in the business of the agency. If he is properly appointed, the principal is responsible for his acts to third persons, and the original agent is responsible for his acts to the principal.

According to S. 190, “ an agent cannot lawfully employ anther to perform acts which he has expressly or impliedly undertaken to perform personally, unless by the ordinary custom of trade, a sub-agent may, or from the nature of the agency, a sub-agent must, be employed.”

Delgatus Non Potes Delegare- This maxim means that an agent must not delegate his duties. An agent must not. As a rule, depute another person to do that which he has undertaken to do. The maxim is “Delegatus non potest delegare, “ i.e, a delegate cannot delegate. The rational principle underlying the rule is that the principal is supposed to have confidence in the honesty or working capacity of the agent; he may not have the same confidence in the person appointed by his agent. Hence, sub-agency is not generally recognized.

However, there are certain exceptions to this rule. Thus, if the ordinary custom of the trade permits the appointment of sub-agent, or if the nature of agency be such that it cannot be accomplished without the appointment of sub-agent then a sub-agent may be appointed. Thus in Mahinder V.s Mohan, A.I.R. (1939) All. 188.-A, the owner of a house at a hill station, appoints a Bank as his agent to let out the property  and gives full discretion to the Bank in the matter of settling the rent. The Bank entrusts the business to a house-agent, B. B let the house to a tenant, recovered rent from him, but did not pay over the same to A. A brought a suit against B for accounts and for the recovery of the rent received by him. B contends that there is no privity of contract between him and A and the suit is therefore not maintainable.

In the above case, A had given very wide powers to the Bank, and the power to appoint an agent under the circumstances might well be inferred. A Bank is usually not expected to go about in search of tenants, and A must have known that other agencies would have to be employed in order to find suitable tenants for the house. Under these circumstances, the Bank had authority to appoint B as agent, and therefore, B is accountable to A. A’s suit must, therefore, be decreed.

4. Co-Agent:- When two or more persons are employed as agents jointly or severally they are known as co-agents where nothing is said, the ordinary presumption is that the authority is joint, i.e. all must concur in execution of the authority, unless a quorum is fixed, or the circumstances, show an intention to the contrary, But where the authority is several, any one can act without the concurrence of the other.

5.Substituted Agent:- According to S. 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. This See, deals with the appointment of a substituted agent. The test to determine whether the person appointed by an agent is a substituted agent of  the principal or the sub-agent of the agent is a substituted agent of the principal or the sub-agent of the agent is whether or not privity of contract between the principal and the person so appointed has been created. A sub-agent is immediately responsible to the agent and is not generally responsible, to the principal the substituted agent becomes by his mere appointment, immediately responsible to the principal for privity of contract is created between them whereas there is no privity of contract is created between the sub-agent and the principal.

For Example-

i)  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.

ii) A authorizes B, a merchant in Calcutta, to recover the money due to A from C & Co. B instruct D, a solicitor, to take legal proceedings againt C & Co., for the recovery of the money. D is not a sub agent, but is a solicitor for A.

6.Factor:- A factor is agent remunerated by a commission, and is entrusted with the possession of goods to sell in his own name as an apparent owner. He can sell them at such times and at such prices as he thinks best. He has thus complete discretionary authority to sell. He can even sell on credit, and receive the price as an actual owner and give a good discharge to the buyer, Persons who, in good faith, advance money to the factor on the sercurity of goods or documents of title are protected on the ground that the possession carries with it an authority to pledge: and this authority cannot be revoked so as to prejudice third persons who have no notice of the revocation. If any special authority is given to a factor who acts beyond the scope of that authority, but within the scope of the apparent authority, the contract is still binding upon the principal. For example: A deposits certain articles with B, asking him not to sell them below a stated price. B undersells to C who is ignorant of A’s instructions to B. A cannot set aside the contract with C. The same is also the case with an auctioneer.

It may be noted that whereas a broker has a particular lien only, a factor has a general lien S.171 for the balance of accounts as between himself and the principal. But the lien applies only to debts due to him in that character and not antecedent debts. A factor has an insurable interest in the goods in his possession.

7.  Broker:- A broker is an agent whose business is to bring about a contractual relation between two parties. It is through his instrumentality that a contract is made between the principal and a third party. He has not authority to contract in his own name. He cannot also sue in his own name. He generally puts the terms of the contract in writing he given to the seller is called the sold note, and that which he gives to the buyer is called the bought note.

The liability of broker depends upon the form of the notes.  If the principal’s name is mentioned, not suit will lie against him, nor can he bring a suit in his own name, Where the principal is not named, but the broker signs as agent, the broker signs as agent, the broker can be used only if there is a usage to that effect. If he acts and purports to deal in his own name, he becomes liable, for he does not sign as agent, but the principal may be held liable by the other party when disclosed, and in that case, the principal can also take advantage of the contract.

8. Auctioneer:- An auctioneer acts in a double capacity. Primarily, he is an agent for the seller. He advertises the auction sale on the seller’s behalf. We know that the bargain in an auction sale is completed as soon as the hammer falls. The goods are then said to have been knocked down to the highest bidder. As soon as the goods are knocked down, the auctioneer becomes the agent of the purchaser also. He resembles a factor inasmuch as he is always in possession of the goods to be sold. But while a factor has a general lien, an auctioneer has only a particular lien. If the purchaser fails to pay for the goods auctioned to him, the auctioneer can bring a suit in his own name. The principal will be bound to the third party if the auctioneer acts within his apparent authority, even though he disobeys instructions privately given e.g., when he inadvertently puts up an article for sale without a reserve price, contrary to the instructions of the principal.

9.Commission Agent:-       A commission agent is a person employed, not to establish privity of contract between his employer and other parties, but to buy or sell goods for the employer on the best possible terms, receiving the commission as a reward for his extentions. The relation between him and his employer is that of principal and agent, and not of seller and buyer. He can charge his employer only for the price paid by him for the goods purchased for the employer although it be less than the limit stated in his letter of instructions except where any custom to the contrary is shown to exist.

10. Del Credere Agent:- A del credere agent is one who, in consideration of extra remuneration, called a del credere commission, undertakes that persons with whom he enteres into contracts on the principal’s behalf will be in a position to perform their duties. He given an undertaking to his principal that the parties with whom the principal is brought into contractual relations will pay the money which may become due under the contract into which they enter. He promises to answer for the default of another but he does not guarantee the performance of the contract, otherwise than as regards payment. He cannot be sued, therefore, if the purchaser refuses to take delivery.

Again he guarantees the solvency of the person with whom he makes contracts for his principal. The del credere agent is liable to pay the seller only if, owing to insolvency of the buyer, the seller is unable to recover the price from the buyer. He is not liable if the buyer, though solvent, has refused to pay on the ground that the seller has not duly performed the contract. His liability towards his principal is, therefore, secondary, he is in effect a surety for the person with whom be deals to the extent of any default by insolvency or something equivatent, but no to the extent of a refusal to pay on a substantial dispute as to the amount due.

It may be noted that a del credere agency may arise by implication from the course of dealings between parties, e.g. for the charging of an extra commission for risk.

11. Pakka Adatia and Katcha Adatia:- These are a species of agents, and their transactions are known in the Bombay market as katchi adat and pakki adat. When an up country constituent wants to enter into any transaction in the Bombay market, he either deals through a Pakka Adatia or a katcha Adatia.

Pakki Adat Transactions:- A Pakka Adatia in the Bombay market is a person who undertakes or guarantees that delivery should, on the due date, be given or take at the price at which the order was accepted or difference paid; in effect he undertakes or guarantees to find goods for cash or cash for goods or to pay the differences.

The relationship between the constituent and the Pakka Adatia is not strictly that of principal and agent, although the Pakka Adatia works for a commission. Between the two, the relationship of principal and agent may exists only upto the extent that the Pakka Adatia is employed for the purpose of ascertaining the price at which the order is to be completed. When that stage is passed, both are principals with reference to the transation.

The constituent has not interest in the contracts into which the Pakka Adatia may enter with the third parties to fulfil his undertaking towards his constituent. No contractual privity is established between the constituent and the third party with whom the Pakka Adatia has contracted. The Pakka Adatia make the contracts with the third parties not as agent but a principal. The Pakka Adatia is personally responsible towards his constituent as well as towards the third parties.

The constituent has no interest in the contracts into which the Pakka Adatia may enter with the third parties to fulfill his undertaking towards his constituent. No contractual privity is established between the constituent and the third party with whom the Pakka Adatia has contracted. The Pakka Adatia makes the contracts with the third parties not as agent but a principal. The Pakka Adatia is personally responsible towards his constituent as well as towards the third parties.

How far is Pakki Adat a Wager?:- The Pakki Adat transactions are well established as a mode of conducting commercial business in the Bombay market. But we must note that the relation between the Pakka Adatia and his constituent, not being that of agent and principal, a transaction between them may be by way of wager like any other transaction between two contracting parties, and the existence of the Pakki Adat relationship between the parties does not of itself negative the possibility of a contract being a wagering contract as between them.

Katchi Adat Transaction:- When a katcha Adatia enters into a transaction for and on behalf of his up country constituent, with a third party in Bombay, he makes privity of contract between the third party and the constitutent, so that each becomes liable to the other, but he also renders himself responsible on the contract to the third party. He does not ordinarily communicate the name of his constituent to the third party The position, as between himself and the third party, is that he is an agent of an unnamed principal with personal liability on himself. His remuneration profits or losses made by his constitutent on the contract entered into by him, on his constituent’s behalf.

The relation between a katcha Adatia and his constituent being that of an agent and principal, a contract between them cannot be a wager. Neither party stands to win or lose according to the fluctuation of price or any other event. The very essence of wager between them is absent.

Courtesy:- Legal Point Foundation