Explain agency and how agency can be organized and also discuss that who agency is terminated? or Define Agency, Agent and Principal

AGENCY :-
Agency is defined in the following words, "The employment of person by another in order to bring the letter into legal relation with a third person."

Agency is a relationship existing between principal and agent.


ESSENTIALS FOR AGENCY :-

1. Agent.

2. Principal.


1. AGENT :-
He is a person employed to do any act for another in dealing with the third parties.


2. PRINCIPAL :-
He is a person who is represented by the agent.



CREATION OF AGENCY:-
Agency may be created in different ways :


1. General Agency :-
An authorized general agent is appointed to do all acts for carrying on a particular business.

Example :- Mr. Ching a factory owner appoints Mr. Kang a General Manager of his factory.


2. Specified Agency :-
When a principal appoints an agent only for a special and single act, it is called special agency.

Example :- Mr. Kate employs Mr. Rifful to sell his car.


3. Agency Created by Necessity :-
If one person acts without authority fr another due to emergency, it is said that agency is created by necessity.


4. Agency Created by Ratification :-
When an unauthorized agent makes a contract on the behalf of his principal without his knowledge. Afterward principal may accept or ratify the contract. It is said that agency is created by ratification.


5. Agency Created by Express Agreement :-
When authority is given to agent by words or written is called expressed agreement.


6. Agency Created by Implication :-
When the conduct of the principal himself toward the other shows that other person is his agent is called agency created by implication.


7. Agency Created by Estoppel :-
Sometimes one principal induces another to believe that unauthorized acts does by his agent are authorized. If once the principal accepts the authority of his agent, then he cannot refuse.



TERMINATION OF AGENCY :-
An agency may be terminated in different ways :


1. Mutual Consent :-
Agency can be terminated by the mutual consent of the principal and agent.


2. Completion of Job :-
After completion of job it stands terminated.


3. By the Principal :-
Agency may be terminated by the principal.


4. Terminated by Agent or Principal :-
At the winding up of the company agency may be terminated by agent or principal.


5. Illegally of Contract :-
It may be terminated by illegally of contract.


6. Agent Gives up his Authority :-
If agent gives up his authority then agency is dissolved.


7. Expiry of Period :-
In case of fixed period agency is terminated with the expiry of period.


8. Case of Bankruptcy :-
In case of bankruptcy of the principal agency is dissolved.


9. Subject of Matter :-
If the subject matter is destroyed agency is also destroyed.


10. Unsound Mind :-
If any person become insane agency dissolves.