Enforcement
and consequences of agent's contracts
Contracts
entered into through an agent and obligations arising from acts done by an
agent, may be enforced in the same manner, and will have the same legal
consequences, as if the contracts had been entered into and the acts done by
the principal in person. Section 226
Contracts
by agent
A
contract made by an agent is binding on the principal for whom it is made. Thus
the manager of a mine can make a contract binding on the owner of the mine.
Compromise
by agent
A
compromise by an agent on behalf of his principal is valid. Thus a compromise
with the authorized attorney of a pardanahnashin lady is valid.
Payment
made to agent
A
payment to an agent is a payment to the principal. Thus where a military
contractor, according to rules, deposited a certain sum in the bank by way of
security. The bank issued a deposit certificate in the name of the military
authorities. The bank subsequently went into liquidation. It was held, that the
bank had become an agent to the military authorities, and on its failure to pay
the military authorities were liable to pay.
Sale
transactions
It
is wrong to assume that every "general" Power-of-Attorney on account
of the said description means and includes the power to alienate or dispose of
property of the principal. In order to achieve that object it must contain a
clear separate clause devoted to that object.
Liability
of principal for acts of agent
A
representation by an agent is as effectual for the purposes of estoppel as one
made by the principal. The liability of the principal upon a contract made on
his behalf is not affected by the bare fact of the agent's personal liability
and the credit given to the agent by the other contracting party.
Agents
are of two kinds, distinguishable as servants and independent contractors. When
the agent is an independent contractor, his employer is not. in general,
answerable for the torts either of the Contractor himself or of his servants.
But when the agent is a servant, his employer will answer for all torts
committed in the course of the employment, whether or not the employer has
obtained any benefit there by. The distinction between a servant and an
independent contractor is that the former is to obey his employer's orders from
time to time and works under the supervision and direction of his employer;
Whereas the latter is to exercise his own discretion as to the mode and time of
doing work for which he has been engaged; he is bound by his contract but not
by his employer's orders.
Suits
by principal
A
principal can sue on a contract entered into by his agent. Thus where the goods
were consigned from Pakistan to be delivered in India. Pakistan Railway carried
the goods to the border and Indian Railway received them. It was the consignor
who paid the Indian Railway. In a suit for damages, it was held that the
Pakistan Railway made the contract with the Indian Railway as an agent of the
consignor for delivery of goods to the consignee, and the consignor can therefore
enforce the contract against the Indian Railway.
Suit
against principal or agent
The
liability of the principal and the agent when concurrent is alternate. The
person contracting with the agent can sue either the agent or the principal.
If, however, he sues the agent to judgment, he cannot afterwards bring a second
action against the principal even though the judgment is unsatisfied and the
plaintiff had no knowledge of the existence of the principal.
Acts
in excess of agent's authority
An
act of an agent in excess of his power-of-attorney does not bind the principal.
The authority conferred by a power-of-attorney must be adhered to strictly, and
if the authority is exceeded, a third party will be unable to make the
principal liable.
Unauthorized
acts of agent
The
principal is liable to the extent of the benefit received in an unauthorized
transaction. Where an agent borrowed for the principal without his authority
but the money was credited to the principal's account, the principal is liable
to pay back the amount.
Negligence
of agent
The
master is liable for the negligence of his agent. Therefore where A drew a bill
in favour of B on C and gave it to B's agent. B's agent had asked A for a bill
drawn on himself and not on C but he kept the bill without ascertaining its
nature for some time. In the meantime C became insolvent. It was held that
assuming both parties were under a mistake as to the bill. B could not recover
the amount of the .bill from A, as his agent had been guilty of gross negligence
in taking the bill and keeping It without ascertaining its nature.
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