Contract of Agency Creation of Agency 1. Agency by express agreement: A contract of agency may be created by an express agreement.

Normally the authority given by a principal to his agent is an express authority enabling the agent to bind the principal by acts done within the scope of his authority. A person may, in such case be appointed as an agent either by word of mouth or by writing. 2. Agency by implied agreement An authority is said to be implied when it is to be inferred from the circumstances of the case and the things spoken or written, or the ordinary course of dealing may be accounted circumstances of the case. Example: A owns a shop in Serampore being himself in Calcutta. He visits the shop occasionally. The shop is managed by B and he is in the habit of ordering goods from C in the name of A, for the purpose of the shop, and of paying for them out of As funds with As knowledge. B has an implied authority from A to order goods from C in the name of A for the purpose of the shop. Agency by estoppel: Where a person by his conduct or by statement has led another person to believe that a certain state of affairs exists that a certain person is his agent, he is estopped from denying the fact of that statement subsequently. Example: A tells T within the hearing of P that he is Ps agent. P does not object to this statement. Later on T supplies certain goods to A who pretends to be acting as an agent of P. P is liable to pay the price to T. Agency by holding out: It is a branch of the agency by estoppel. In this case, a prior positive act on the part of the principal is required to establish agency subsequently. Agency by necessity. In certain circumstances the law confers an authority on the person to act as agent for another without requiring the consent of that person. Such type is called as

Agency by necessity. He has the authority in an emergency to do all such acts for the purpose of protecting his principal from loss as would be done by a person of ordinary prudence.(Sec. 189).However the following are the essentials: 1.The agent was not in position to communicate with the principal. 2. There was an actual and definite necessity for acting on behalf of the principal. 3. The act was done to protect the interest of the principal. 4. The agent acted as a man of ordinary prudence and the act was done bonafide.

Agency by ratification A person may act on the behalf of another without his authority in the following two ways: (a) Where A acts as Bs agent though he has no prior authority from B but while acting, A contemplates that he is acting for B. (b) Where A is Bs agent for doing a particular thing but at the time of making the contract with the third party he exceeds his authority which B had given to him. In both cases, B the principal, may either accept the act of the agent or reject it. If he accepts the act of the agent done without his consent later on he is said to have ratified the act of the agent. If he ratifies it, it places the parties in the same position in which they would have been if A had Bs authority at the time he made the contract.