Types of Agents under Indian Contract Act
Introduction
Agents play a key role in business and legal transactions by acting on behalf of another person. The Indian Contract Act, 1872 recognises different types of agents based on their authority, role, and nature of work. Understanding these types helps in identifying the scope of authority and liability of agents.
Meaning / Definition
An agent is a person employed to do any act for another or to represent another in dealings with third persons. Different types of agents are classified based on the nature of authority and the functions they perform.
Modes or Types
Based on Authority
Special Agent
A special agent is appointed to perform a specific act or transaction.
- Authority is limited to a particular task
- Ends once the task is completed
- Cannot bind the principal beyond the given authority
General Agent
A general agent is appointed to conduct all acts relating to a particular business.
- Has wide authority to act in the usual course of business
- Can bind the principal for acts done in good faith within scope
Universal Agent
A universal agent has unlimited authority to act on behalf of the principal.
- Can perform all lawful acts that the principal can do
- Rare in practice due to wide powers
Based on Delegation
Sub-Agent
A sub-agent is appointed by an agent to assist in the work.
- Works under control of the original agent
- Agent remains responsible to the principal
- Valid only when properly appointed
Substituted Agent
A substituted agent is directly appointed for the principal by the agent.
- Becomes agent of the principal, not of the original agent
- Common where expertise is required
Based on Commercial Role (Mercantile Agents)
Factor
A factor is an agent entrusted with possession of goods for sale.
- Can sell goods in his own name
- Has wide discretion (freedom to decide)
Broker
A broker brings parties together for a contract.
- Does not have possession of goods
- Acts as a middleman
Auctioneer
An auctioneer sells goods through public auction.
- Agent of seller initially
- Becomes agent of buyer after sale
Commission Agent
A commission agent buys or sells goods for the principal.
- Earns commission for services
- May act in own name
Del Credere Agent
A del credere agent guarantees payment by the buyer.
- Acts as agent and guarantor (person who promises payment)
- Gets extra commission
Other Types
Co-Agent
Two or more agents appointed together.
- Authority may be joint (act together) or several (act individually)
Non-Mercantile Agent
Agents not involved in business activities.
- Includes estate agents, insurance agents, solicitors
Agency by Relationship
Husband-Wife Agency
- No automatic agency exists
- Wife may bind husband for necessities (basic needs) if living together
- Husband not liable if certain conditions are proved (e.g., sufficient allowance)
Practical Example
A shop owner appoints a manager to run daily business. The manager is a general agent and can make routine purchases and sales. If the manager appoints a delivery person, that person is a sub-agent. If the owner hires an auctioneer to sell goods, the auctioneer is a mercantile agent.
Summary
- Agents are classified based on authority, function, and relationship
- Special agents have limited authority; general agents have wider authority
- Sub-agents work under agents; substituted agents work directly for principal
- Mercantile agents include factor, broker, auctioneer, and commission agent
- Del credere agent guarantees payment by third party
- Husband-wife agency exists only in limited situations
- Understanding types helps determine rights, duties, and liability