Since it is not always possible for a person to do everything by himself, it becomes necessary to delegate some of the acts to be performed by another person. Such another person is called an agent. The person represented is called the principal. The law relating to agency is contained in Chapter X (Sections 182 to 238) of the Indian Contract Act, 1872

MEANING OF CONTRACT OF AGENCY

By a contract of agency, a person employs another person to do any act for him or to represent him in dealing with third persons so as to bind himself by the acts of such another person.

The law of agency is based on the following general rules:

(i)  Whatever the principal can do by himself, he may get the same done through an agent, except when the act involved is of personal nature e.g. the principal can¬not ask his agent to become insolvent on his behalf or to marry on his behalf.

(ii)  What a person does by another, he does by himself. Thus, the acts of the agent are the acts of the principal.

AGENT

Meaning of an Agent [Section 182]

An agent is a person employed to do any act for another or to represent another in dealings with third persons. Thus, an agent establishes a contract between such another person and third person.

Who May be an Agent [Section 184]

As between the principal and third persons, any person (whether he has contractual capacity or not) may become an agent. Thus, a minor or a person of unsound mind can also become an agent.

Agent’s Responsibility to his Principal (Section 184]

An agent who is not of the age of majority and of sound mind is not responsible to his principal.

Example X hands over to Y, a minor, a TV set worth As 18,500 and instructs him not to sell below Rs 19,000. Y sells the same to Z for Rs 18,000. X will be responsible to Z for the act of Y but Y himself will not be responsible to X since he has no contractual capacity.

Distinction between an Agent and Servant

Basis of distinction	An agent	Servant
1. Authority to create contractual relationship	Hehastheauthoritytocreate contractual relationshipbetween the principal and a third party.	He ordinarily has no such authority.
2. Work of several persons	He may work for several principals at a time.	He ordinarily works only for one master.
3. Remuneration	He usually gets commission..	He usually gets salary orwages.

Distinction between an Agent and Independent Contractor

Basis of distinction	An agent	Independent contractor
1. Control and supervision	He works under the control and supervision of the principal.	He works independently of the control of the person for whom he does the work.

2. Personal liability	He is not personally liable for allacts done by him within the scope of his authority.	He is personally liable for all acts done by him.
3. Remuneration	He usually gets commission.	He   usually   gets the    fixed contracted amount or amount at afixed contracted rate.