Email Follow Up Template

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THE LAW  
OF AGENCY
 AKMAL RIZAL IZZATAQILAHANIS LAI NING EN
GROUP 8
Agency in law is the relationship that
exists when one person or party (the principal) engages another (the agent) to act for him.
Law of agency in Malaysia same as the law in India as consist in India Contract Act 1872.It is governed by Part X of the Contracts Act 1950.
Introduction
Agent 
vs
Principal
Section 135 of the Contracts Act 1950 states that:

Agent is a person employed to
do any act for another or to
represent another in dealing with
third person
Section 135 of the Contracts Act
1950 states that:

Principal is the person to whom
such act is done, or who is so
represented.
Differences Between Agent & Principal
Principal

The person who delegates the authority

The person on whose behalf he acts

Agent

To whom the power is delegated

A person who act in place of another
ABILITY TO CONTRACT

Section 137 Contract Act 1950 states that

Anyone can be an agent between the principal and the third
party with the condition, agents recruited among juveniles
and of imperfect intellect could not be accountable for task
performed on behalf of their principal
In short, agents are NOT REQUIRED to have full capacity in dealings
with the principal and the third party

The principal is not encouraged to appoint the juveniles as
his agent as the principal will not be able to claim anything from the
juveniles

Only the principal MUST HAVE full capacity to enter into the contract
(Section 136 Contract Act 1950

1. NAMED PRINCIPAL
- Principal’s name has been disclosed to third party by the agent

- The third party knows the name and identity of the Principal

- Knows that the agent is acting on behalf of the Principal

TYPES OF PRINCIPAL
2. DISCLOSED PRINCIPAL
- The principle’s existence is disclosed but the identity is unknown to the third party

- He only knew the person whom he is dealing with is acting as an agent

- Third party DOES NOT know the name and identity of the principal
TYPES OF PRINCIPAL
3. UNDISCLOSED PRINCIPAL
- The principal’s existence and identity is UNKNOWN to the third party

- The third party acts under the impression that he is contracting with the agent personally

- Only after the contract has been signed, the third party comes to know that the person whom he is dealing with was actually acting on behalf of the principal
TYPES OF PRINCIPAL
TYPE OF AGENT
GENERAL AGENT
 An agent who is employed to act in the
name and on behalf of principal in particular
goods or trade.
TYPE OF AGENT
SPECIAL AGENT
 An agent who has authority to act only in aspecifically designated set of transactions.
TYPE OF AGENT
UNIVERSAL AGENT
An agent who has been given full power to act onbehalf of a person or business.
THE NATURE WORK TO BE PERFORMED

FACTOR

Is a mercantile agent to whom thepossession of goods are given for thepurpose of selling them

He usually sells the goods in own name

He can exercise a general right of lien onthe goods delivered to him for balance ofpayment if any
THE NATURE WORK TO BE PERFORMED

AUCTIONEER

Is an agent who is appointedMby the principal to sell the goods on his behalf at a public auction for a reward in form of commission

E g Reserve price
THE NATURE WORK TO BE PERFORMED
BROKER

Is an agent appointed by the principal for the purpose of selling or buying goods on his behalf

He do not have possession of goods nor he can contract in his own name

He bring seller buyer together to bargain

He gets commission (brokerage
THE NATURE WORK TO BE PERFORMED
DEL CREDERE
AGENT

Is one who guarantees to his principal, the performance of the financial obligation by party with whom he enters into a contract on principal behalf, in consideration of an extra commissionHe becomes surety h ad become liable on thedefault of third partyThis agent takes responsibility for payment of debtors
•If debtors do not pay, this agent will pay from his pocket
•But, he will charges del credere commission for this additional services
•Agent as well as guarantor
CREATION OF AGENCY
Express Agreement
Principal is given to agent in written or by word of mouthHe can bind the principal to the third parties by his act to the extent he is delegated with the authorityNo one special formalities need to be followed in the establishment of an agency contract
CREATION OF AGENCY
Agency by Ratification:
"Ratification“ means subsequent adoption or acceptance by a person of unauthorized act done by another on his behalf without any authority

The principal may accept or not to admit the action if the action which the agent did violate his orders
CREATION OF AGENCY
Agency by Necessity:
When an agency is created by the circumstances The impossibility of getting the instruction from the principal is the basis of creation of agency by necessity
CREATION OF AGENCY
Agency by Holding Out:
Some positive conduct of the principal indicates that a particular is his agent
CREATION OF AGENCY
Agency by Holding Out:
Some positive conduct of the principal indicates that a particular is his agent
DUTIES OF AN AGENT TO HIS PRINCIPAL
To obey the
principal’s
instructions
Sec 164 An agent who fails to obey the principal’s instructions will result in breach of contract and the agent will be liable for any loss suffered by the principal An agent under no duty to obey instructions of his principal if the instruction are unlawful.
DUTIES OF AN AGENT TO HIS PRINCIPAL
To exercise care and diligence in carrying out his work and to use such skill as he possesses
Sec 165 An agent bound to conduct the business of the agency with as much skill as is generally possessed by persons engaged in similar business, unless the principle has notice of his want of skill
DUTIES OF AN AGENT TO HIS PRINCIPAL
To exercise care and diligence in carrying out his work and to use such skill as he possesses
Sec 165 An agent bound to conduct the business of the agency with as much skill as is generally possessed by persons engaged in similar business, unless the principle has notice of his want of skill

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