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This document provides an overview of the key concepts in agency law, bailment, indemnity, and guarantee. It defines agency as a relationship that arises when one person acts on behalf of another. It outlines the duties and rights of agents and principals. Bailment is defined as the delivery of goods by one person to another for a specific purpose. Indemnity involves one party promising to compensate another for losses incurred, while guarantee involves a third party promising to fulfill another's debt or obligation if they default. The document compares and contrasts indemnity and guarantee.
This document provides an overview of the key concepts in agency law, bailment, indemnity, and guarantee. It defines agency as a relationship that arises when one person acts on behalf of another. It outlines the duties and rights of agents and principals. Bailment is defined as the delivery of goods by one person to another for a specific purpose. Indemnity involves one party promising to compensate another for losses incurred, while guarantee involves a third party promising to fulfill another's debt or obligation if they default. The document compares and contrasts indemnity and guarantee.
This document provides an overview of the key concepts in agency law, bailment, indemnity, and guarantee. It defines agency as a relationship that arises when one person acts on behalf of another. It outlines the duties and rights of agents and principals. Bailment is defined as the delivery of goods by one person to another for a specific purpose. Indemnity involves one party promising to compensate another for losses incurred, while guarantee involves a third party promising to fulfill another's debt or obligation if they default. The document compares and contrasts indemnity and guarantee.
Guarantee Sk. Nazibul Islam Faculty Member,BIBM Agency An agency relationship arises when one person(the agent) acts for the benefit of and under the direction of another(the principal) Agency relationship is usually formed by contract. Agent & Principal An agent is a person employed to do any act for another or to represent another in dealings with third persons.-Sec.182 The person for whom such act is done or who is represented is called the principal. P appoints X to buy 100 bales of cotton on his behalf. P is the principal and X is his Agent.
The relationship between P and X is called Agency. Power of Attorney An agent may be appointed by the principal, executing a written and stamped document. Such a document is called Power of Attorney. There are two kinds of power of attorney: General and Special. A general power is one by which the agent is given an authority to do certain objectives, e.g., managing an estate or a business. A special or particular power may be appointed by which an agent is authorized to do a specific thing e.g., selling some goods. Enforcement and consequences of Agents contracts The function of an agent is to bring about contractual relations between the principal and third parties. Usually agents are appointed with specific instructions and authorized to act within the scope of their instructions. Acts of the agent within the scope of the instructions bind the principal as if he has done them himself. There is a legal maxim regarding agency He who does through another does by himself. The act of an agent is the act of the principal. Contracts entered into through an agent, and obligations arising from acts done by an agent, may be enforced in the same manner and will have the same legal consequences, as if the contracts had been entered into and the acts done by the principal in person.- Sec.226. Who can appoint an Agent? Any person who is of the age of majority according to the law to which he is subject, and who is of sound mind, may employ an agent.-Sec.183. Who may be an Agent? Any person may be an agent, even a minor. A minor acting as an agent can bind the principal to third parties. But a minor is not himself liable to his principal.- Sec.184. Joint Principals: Several principals can jointly appoint one agent. The agent can act in respect of those affairs in which all the co-principals are jointly interested. Classes of Agents Broker Factor A Commission Agent Auctioneer A Del credere Agent i.e. (Risk taker) General Agent and Particular Agent Broker brings buyer and sellers into contract with one another against commission. Factor is a mercantile agent who kept goods for sale and has got discretionary power to enter into contract of sale with third party. Commission Agent is one who secures buyers for a sell of goods in return for a commission.A commission agent may have possession over the goods or not. An Auctioneer is one who is authorized to sell goods of his principal by auction. He has a particular lien on the goods for his remuneration. He has the goods in his possession and can sue the buyer in his own name for the purchase price. An auctioneer acts in a double capacity. Up to the moment of sale he is the agent of the seller. After the sale he is the agent of the buyer. An auctioneer has implied authority to sell the goods without any restriction.
A Del Credere Agent is one who for extra remuneration guarantees the performance of the contract by the other party, if the party fails to perform as per agreement then Del credere must pay compensation to the principal.
General Agent represents the principal in all matters concerning a particular business. Factors and commission agents are usually general agents. Particular Agent who is appointed for a specific purpose e.g., to sell a particular article or time.
Agency Creation Agency by express agreement Agency by implied agreement
Express Agency An agency that occurs when a principal and an agent expressly agree to enter into an agency agreement with each other. Exclusive agency contract Power of attorney Express agency contracts can be either oral or written unless the Statute of Frauds stipulates that they must be written.
I mplied Agency
An agency that occurs when a principal and an agent do not expressly create an agency. The agency is implied from the conduct of the parties. The extent of the agents authority is determined from the particular facts and circumstances of the particular situation. Incidental authority
Agency by Ratification An agency that occurs when: 1. A person misrepresents himself or herself as anothers agent when in fact he or she is not, and 2. The purported principal ratifies (accepts) the unauthorized act.
Agents Duties to Principal Conduct the business according to the direction of the principal To carry out business with reasonable care and skill. Render proper accounts. Communicate with principal and seeking instruction. Refund the benefit for illegal transaction on principals own account.
Agents Duties to Principal (cont.) To pay sums received for principal. Protection of the interest at the death or insanity of the principal. Supply information to the principal.
Rights of Agent Enforcement of rights Right to receive remuneration Agent not entitled to remuneration for business misconducted Agents lien Right of stoppage of goods in transit Right to receive damage for negligence or inefficiency of principal.
Termination of Agency
Termination of Agency by the act of the parties Mutual agreement Revocation of agents authority by principal Renounce of authority by agent
Termination of Agency by the Operation of Law: By performance of the contract By lapse of time By death of any party By insanity of any party By insolvency of any party By supervening impossibility
Bailment Bailment is the delivery of goods from one person to another for some purpose with a contract, when the purpose is accomplished goods will be returned. Characteristics or Requisites of Bailment Contract Delivery of goods Purpose Ownership Possession Return Moveable goods Other elements of contract Duties of the Bailor To disclose faults in goods bailed
Payment of expenses in gratuitous bailment
To receive back the goods
Rights of Bailee
Right to know the fault of bailed goods
Right to get damage & expenses
Bailees lien
Types of Bailment Gratuitous Bailment:A gratuitous bailment is one in which neither the bailor, nor the bailee is entitled to any remuneration, e.g., loan of an article gratis; safe custody without charge, etc. Bailment of Reward:A bailment for reward is one where either the bailor or the bailee is entitled to remuneration, e.g., a motor car let out for hire; goods given to a carrier for carriage at a price; articles given to a person for being repaired for a remuneration; pawn etc.
Duties of the Bailee To take reasonable care of the bailed goods Return of bailed goods Not unauthorized use of bailed goods Not mixture the bailed goods with bailors own goods Return of accretion to the goods bailed
Guarantee Guarantee is a promise normally given by a third person to the lender for the present or future debt of the borrower. Person who gives the guarantee is called surety or guarantor.To whom guarantee is given is called beneficiary.
Types of Guarantee Performance guarantee Letter of credit Shipping guarantee Custom & Excise guarantee Essential Features of Guarantee Guarantors liability is secondary Guarantee may be either written or oral Guarantee may be Specific or Continuing Party must be competent to give guarantee Minor cannot give guarantee Guarantee must be supported by lawful consideration A guarantee obtained under misrepresentation, fraud and undue influence is void able.
Discharge of Surety Death of the surety Discharge on variation of terms Discharge by the performance of the debtor Discharge by notice of revocation I ndemnity Indemnity is defined as a contract by which one party promises to save the other from loss caused to him.The person who makes such promise is called indemnifier and the other person is called the beneficiary.
Banks and letters of I ndemnity Loss of term deposit receipt Issue of duplicate draft Loss of Travelers Cheque Loss of safe custody receipt Loss of gift cheque
Distinction Between Guarantee & I ndemnity 1.Number of parties: In case of guarantee there are three parties- the principal debtor, the creditor and the surety. A contract of guarantee requires the concurrence of the three parties. In case of indemnity there are only two parties- indemnified and indemnifier. 2.Number of contracts: In case of guarantee there are two contracts, one between the principal debtor and the creditor and the second between the surety and the creditor. On the other hand, in a contract of indemnity, there is only one contract between the indemnifier and the beneficiary. 3.Request: In a contract of guarantee, the guarantor undertakes his obligation at the request, express or implied, of the principal debtor; no such request is necessary in respect of an indemnity. 4.Nature of liability: In a contract of guarantee the liability of the principal debtor is primary and that of surety is secondary. The person giving an indemnity is primarily and independently liable. 5.Purpose of contracts: A contract of guarantee is to provide necessary security to the creditor against the loan but a contract of indemnity is made for reimbursement of loss.
6.Right of parties: The surety has the right to recover from the principal debtor the amount paid by him under the contract of guarantee, the indemnifier cannot claim reimbursement from anybody else. 7.Nature of risk: The surety agrees to discharge the existing liability of the principal debtor. So it is a subsisting risk. The indemnifier promises to save the indemnified against risk of loss happening in future. So it is a contingent risk.
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