Principal
and agent
An
agent is a person employed to do any act for another or to represent another in
dealing with third persons. The person for whom such act is done, or who is so
represented is called principal. Section 182 of the Contract Act, 1872.
Relationship
of agency
Agency
is the legal relationship between one person, the agent having authority to
act, and having consented to act, on behalf of another, the principal,
particularly to place the principal in contractual relations with a third
party. In relation with third parties the principal is bound by acts done by
his agent within the scope of his express authority, or his general authority,
or the authority he has represented the agent or enabled him to represent
himself.
Ratification
by the principal
A
principal may, however, be liable for the tort committed by a person without
his authority if he subsequently ratifies the act. But the principal will be
liable only if the following two conditions are fulfilled:
The
wrongful act must have been done on behalf of the principal.
The
principal must know the nature of the act which has thus been done on his
behalf, unless, indeed, he is content to dispense with any such knowledge and
to approve and sanction the acts of agents whatever they may be.
Course
of employment
The liability
of the principal has been extended for .those acts of the agent which were done
for the benefit of the principal. The word benefit is a vague term and it is
better to adhere to the words 'course of employment' or 'scope of authority. It
is a matter of indifference whether a person is styled servant or agent since
it is the retention of control which makes a principal responsible.
Just
as the tort must be committed by a servant either under the actual control of
his mater or while acting in the course of employment, the act of the agent
will only make the principal liable if it is done within the scope of his
authority. By process ratiocination the courts have made a slight distinction
by attempting to find a right to control in case of simple agency.
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