This site is under development, some of the functionalities may not work properly.
Aditya Marwah
Asked August 08, 2013

What is an agency

  • 3 Answers

What is an agency and what are the landmark cases to explain the concept and deal with the types of agency(s)?

Answers 3

Default avatar

Agency consists of a triangular relationship between  Principal, Agent and the Third Party. An agent in this set up is a person who acts for the principal by way of express or implied consent. Rule of 'qui facet per alium facit per se' suggests that 'he who does anything by another, does it himself.' Agency denotes that 'relation which exists where one person has an authority or capacity to create legal relations between a person occupying the position of principal and third parties.': (Law of Agency: S.C. Srivastava). 

Cases: concept of agency. 

 P. Krishna Bhatta and Ors. v. Mundila Ganapathi Bhatta: AIR 1955 Mad 648 (pg.651)

Chief Treaasury Officer v. Union of India and Ors.: 2013 (4) ADJ 102

The National Insurance  Company limited v. M. Nandan and ANR.: 2004 ACJ 1449

There are 102 kinds of agents and 8 types of agencies under different laws, kindly clarify what type of agency exactly you are looking for.

Agree Comment 0 Agrees over 7 years ago
  • Default avatar
    Swathi N
    Explain agency with reference to krishna bhatta v Ganapathi bhatta case
    Agree 0 Agrees 5 months ago

Default avatar

Agency refers to the  legal relationship that exist between an agent and the principal, which may arise either through implied or express agreement between the principal and the agent. As per section 182 of Indian contract Act, 1872 “An "agent" is a person employed to do any act for another or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the "principal". Agent helps in forming  contractual relationship between the principal and the third party . He  must have an intention to act on behalf of the principal and capacity to bind the principal by his own acts. The maxims “Quit facit per alium facit per se” which means he who acts through another ,deems to act himself and  “Respondeat superior”  which means the responsibility of the  superior for the acts of their subordinates,  helps in explaining the relationship between an agent an principal. A contract of agency can be created either by express authority or implied authority ( like by estoppels, by holding out ) or by ratification.


 Refer Case of The Coffee Board vs Commissioner Of Commercial Taxes ... on 16 August, 1985,Equivalent citations: ILR 1986 KAR 1365, 1985 (2) KarLJ 397, or  Bikram Kishore Manikya Bahadur vs Jadab Chandra Choudhury And Ors. on 27 August, 1935,Equivalent citations: AIR 1935 Cal 817, which explains the relationship between the agent & the principal.

Agree Comment 0 Agrees over 7 years ago

Default avatar

An agency is a relationship that comes into existence when one person [the Agent] consents to act on behalf of another [the Principal] in dealings with third parties subject to the control of the Principal. Therefore, the agent acts as a medium of interface between third parties and the Principal, often for the achievement of certain goals. This is often a contractual relationship and is fiduciary in nature. The agent is expected to exercise a certain degree of loyalty to the principal and exercise reasonable care in order to protect the interests of the principal. Chapter X of the Indian Contract Act of 1872 contains the statutory provisions related to the law of Agency in India.

The main distinguishing point between a Master-Servant relationship and a Principal-Agent relationship is that a servant is often engaged in order to render services for the master under the control and direction of the master. On the other hand, an agent does not render services but instead acts in a representative capacity on behalf of the principal. The Madras HC in Krishna v. Ganapathi [AIR 1955 Mad 648] identified representative character and derivative authority as the distinguishing features of an agent. [Also see Lakshminarayan Ram Gopal & Sons v. Hyderabad Government AIR 1954 SC 364]

However, mere usage of the term agency is not sufficient and one needs to go into the true nature of the agreement and the functions and responsibilities that can be derived from it [Gaya Sugar Mills v. Nand Kishore Bajoria AIR 1955 SC 441]. Any person who is of age of majority may employ an agent who is also of the age of majority and of sound mind [Ss. 183 and 184 of the Indian Contract Act, 1872].

Agree Comment 0 Agrees over 7 years ago

Please Login or Register to Submit Answer

Directory ads
Need to talk to a lawyer?

Book a phone consultation with a top-rated lawyer on Lawfarm.