Difference between sub-Agent & substitute Agent
SUB-AGENT:- Sub agent is a person employed by and acting under the control of the original Agent in the business of the Agency under section 191 of the Act. An agent may sometimes delegate the duty that has been delegated to him by the Principal to somebody else. Ordinarily, an agent cannot delegate the duty he is supposed to perform himself to another person (Delegat us Non Potest Delegare), except in particular circumstances where he must, out of necessity, do so. Section 191 of the Indian Contract Act, 1872 defines a sub-agent to be a person employed by and acting under the control of the original agent in the business of the agency.
Delegatus non potest delegare
An agent cannot in ordinary circumstances delegate the duty that was delegated to him. The principle is based upon the idea that when a Principal appoints an agent, he does so by placing his confidence and trust in the agent and might not have similar trust in the work of another person.
LEGAL POSITION OF SUB-AGENT PROPERLY APPOINTED:- Sub Agent may be either properly appointed or improperly appointed. If he is appointed by the Agent with the authority of his principal he is called a sub-agent properly appointed. If he is appointed without the authority of the principal he is improperly appointed.
Sec. 192. Where a sub-agent is properly appointed,
The principal is, so far as regards the third person, represented by the sub-agent, and is bound by and responsible for his acts as if he were an agent originally appointed by the principal.
The agent is responsible to the principal for the acts of the sub-agent When the sub-agent is appointed properly with the consent of the principal, the principal is bound by his acts and is responsible for his action as if he was an agent appointed by the principal.
Agent’s responsibility for sub-agent.
-The sub-agent is responsible for his acts to the agent, but not to the principal, except in case of fraud or wilful wrong against the principal he becomes directly responsible to the principal under section 192 of the Act.
Substituted agent –
Sec. 194. Where an agent, holding an express or implied authority to name another person to act for the principal in the
business of the agency has named another person accordingly, such person is not a sub-agent, but an agent of the principal for such part of the business of the agency as is entrusted to him.
Difference between sub-agent and substituted agent
| Basis of distinction | Sub-Agent | Substituted-Agent |
| 1. Control | A sub-agent is the agent of the original agent as he works under the control of the agent | a substituted agent is the agent of the principal because he works under the control of the principal. |
| 2. Responsibility | A sub-agent is responsible for all the acts of an original agent and for the acts of fraud or willful wrong to the principal | a substituted agent is responsible to the principal alone. |
| 3. Contract | There is no direct contract between the sub-agent and the principal | there is a direct contract between the substituted agent and the principal. |
| 4. Appointment: | Agent appoints a sub-agent only when he finds it necessary as per the custom of the trade or the nature of the agency | a substituted agent is appointed by the agent when he has express or implied authority to do so from the principal. |
| 5. Liability | Sub-agent is liable to the agent | The substitute agent is liable to the principal. |
| 6. Remuneration to agents | The agent pays remuneration or commission to a sub-agent | the principal makes such payments. |
| 7. Responsibility towards the third party | A principal is not responsible to the third parties for the acts committed by the sub-agent provided he has not been appointed by the consent of the principal. | The principal is bound to all the acts of a substituted agent in the same way and extent as he is liable to the acts of his agent. |
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