The agent has been defined under section 182 of the Contract Act 1 872 as follows:
“An agent is a person employed to do an act for another or to represent another in dealings with the third person.”
The person for whom such act is done, or who is so represented, is called the principal.
It is impossible for every person to do everything himself. The law allows him to be represented in the performance of his legal acts by another.
Definition of Agent
DAVID-A-G-SARRE: An English author defines the Agent as’ follows:
An agent is a person who is employed for the purpose of bringing his principal into contractual relations with third parties and the person who employs the agent is called Principal.
See Also: Contract of Guarantee
Example: A sends 1000 units of his product to B to be sold for $10 each and he allows 5% commission to B on total sales. This will be treated as a contract of agency. A will be known as principal and B will be known as an agent.
Different Types of Agents
The following are the major kinds of agents:
Commission Agents
A commission agent is a person who buys and sells goods in the market, on behalf of his employer on the best terms and conditions and who receives a commission as remuneration for his services.
Del-Credere Agents
A Del-Credere agent is a person who for extra remuneration provides a guarantee to his principal for the performance of the contract by the third party.
He indemnifies his principal for any loss caused to him by the third party.
If the third party (debtor) does not make payment or becomes insolvent, the Del-Credere Agent has to make payment to his principal.
Illustration: A who is the agent of B sells B’s goods on credit and accepts the responsibility that if the amount is not recovered from the credit customers.
He will pay from his own pocket and for this service he gets extra commission. A is a del-creder agents.
Factor
A factor is a commission agent who is entrusted with the possession of goods and he can sell them with his own name.
He looks like the real owner of the goods entrusted to him. He can also advance money by pledging the same goods.
Example: A the owner of the goods sends his goods to B to be sold on A’s behalf and allows B to get a commission from sales, B will stand as a factor.
Broker
He is also a commission agent. He is not entrusted with possession of goods and cannot sell the goods with his own name.
He brings together to the seller and buyer into contractual relations and if the transaction takes place, he is entitled to get a commission.
See Also: Parties to the Contract of Indemnity
Example: A who is sitting at Bahawalpur, brings B and C into the contractual position who are sitting at Lahore and Karachi and gets a commission from B and C. In this case A is working as a broker.
Auctioneer
An auctioneer is a person who sells goods to the highest bidder at a public sale for a commission. He is the agent of the buyer as well as the owner of the goods.
Co-Agent
Where the agental authority is given to several persons without mentioning that any one or more of them shall be authorized to act in the name of the whole body, they have a joint authority and are called co-agents.
Sub-Agent
A sub-agent is a person employed by and acting under the control Of an original agent in the business of agency Sec. 191.
Personal Liabilities of an Agent
Sections 230. 233 and 234 are relevant to the personal liabilities of an agents and he is personally liable under the following cases:
- When the contract is made by an agent for the sale or purchase of goods for a merchant resident abroad.
- Where the agent does not disclose the name of his principal.
- Where the name of the principal is disclosed but he cannot be sued, for example, agents work for a minor.
- When he enters into a contract where he is expressly declared to be personally liable.
- When an agent enters into a contract for a principal who is actually not in existence. For example, promoters acting for the company which is yet to be incorporated.
- When the agents act without having authority from his ‘principal.
- When the agents sign the contract in his own name without disclosing that he is signing on behalf of his principal.
- When the agents pay or receive money by mistake or fraud.
