Agency
/ˈeɪdʒənsi/
Contract Law Term
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Definition
A relationship in which one person (the agent) is authorised to act on behalf of another (the principal), creating legal relations between the principal and third parties. Governed by Sections 182–238 of the Indian Contract Act, 1872. The agent binds the principal by acts done within the scope of actual or apparent authority. An agent owes fiduciary duties — loyalty, obedience, care, and accountability — to the principal.
Examples
Case Study
In Loon Karan Soni v. John and Co. (1967), the Supreme Court held that an agent cannot delegate their authority without the principal's consent (delegatus non potest delegare), unless the nature of the agency or trade custom permits delegation. The principal is bound only by acts of the sub-agent that the principal has authorised.
Key Cases
Loon Karan Soni v. John and Co.
1967AIR 1967 SC 919
An agent cannot delegate authority without the principal's consent — delegatus non potest delegare. The principal is bound only by acts within the agent's authority. Foundational Indian case on the scope of agency authority.
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