Kinds of Agents in Contract Law
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Kinds of Agents in Contract Law

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Kinds of Agents

Kinds of Agents in Contract Law

Kinds of Agents in Contract Law – There are 3 types of agents in contract law, these kinds of agents in contract law are;

  1. General Agent
  2. Special Agent
  3. Mercantile Agent

General/Universal Agent

This is one of the kinds of agents in contract law. The general agent is employed by the principal to do anything within his authority in all commercial transactions or in all transactions relating to a specific trade or business. The principal grants the authority to the agent on his behalf to perform such transactions.

The general agent is one who is authorized by the principal to do all the acts on his behalf that the principal can lawfully do and this is delegated to the agent. The general agent is also known as Universal Agent.

Thus, it may be assumed by the third party that such an agent has the authority to do all that is usual for a general agent to do. Any private restrictions on the agent’s authority do not affect the third party.

Illustration: A is a manager of a Bank. He can bind the principal by doing anything which falls within the ordinary scope of that business.

Special Agent

The other kinds of agents in contract law. A special agent is employed by the principal to do some particular task or specific act. Therefore, outside the specific act, the agent has no authority or power to do any other act.

In this case, the third party cannot assume that the agent has unlimited authority because the special agent has limited authority or power relating to that specific act which is assigned by the principal to the special agent to work on his behalf.

Illustration: If the special agent is employed by the principal to sell the cars. The special agent does not do anything outside his authority i.e. selling a car.

Mercantile Agent

The mercantile agent is provided under section 2(g) of the Sale of Goods Act, 1930, as a mercantile agent is a person who in the customary course of business has an agent’s authority either to sell the goods or consign the goods or to raise the money on the security of goods.

Thus, as per this definition, the mercantile agent covers the following;

a) Factors

A factor is a person appointed by the principal to sell the goods which are in the possession of the principal or to purchase the goods for the principal.

Therefore, the factor is the evident owner of the goods in his custody or possession and thus can sell them in his own name and receive payment for the same.

The factor also has an insurable interest in the goods which are in the possession of the factor and a general lien regarding any claim that he may have to arise out of the agency.

b) Brokers

A broker is a person whose business is to make contracts with the other parties on behalf of the principal for the sale and buying of the goods or services.

Therefore, a broker does not have possession of the goods or services because the broker only makes a contract for the principal.

Also, the broker has no lien over the goods because the broker does not have any kind of possession of the goods or services.

c) Del Credere Agent

A Del Credere Agent is a person who ensures or gives guarantees to his principal that the creditors of the goods will pay for the goods that they buy for extra remuneration.

In failure to pay by the third party, the Del Credere Agent needs to pay the due amount to the principal due to the default of the third party.

d) Bankers

As we know, the relationship between a banker and a customer is basically similar to the relationship between the debtor and the creditor. However, when a banker sells or purchases the securities or collects the cheque, dividends, interests, bills of exchange or promissory notes on behalf of his customer.

Therefore, the banker has a general lien on all the securities in his possession regarding the general balance due to him by the customer.

e) Auctioneers

An auctioneer is a person who sells goods by performing the auction of that goods. An auction is a process by which goods are sold to the highest bidder in a public competition to bid higher for the goods auctioned. The auctioneer cannot warrant his principal’s title for the selling or bidding of the goods that are auctioned.

Therefore, the auctioneer is the agent of the seller until the goods are auctioned and sold. However, after selling the goods by auctioning, the auctioneer becomes the agent of the purchaser. Also, he is a witness that the sale has taken place.

f) Partners

Partner is defined under the Partnership Act, 1932, as every partner is an agent as well as the principal of every other partner in a partnership firm. Also, every partner is the agent of the firm for the business of the firm.

Frequently Asked Questions

What is an agent and what kinds of agents?

Majorly, there are 3 types of agents in contract law, these are; 1) General Agent, 2) Special Agent, and 3) Mercantile Agent.

What are the kinds of agents in the Indian Contract Act, 1872?

Kinds of Agents in Contract Law – There are 3 types of agents in contract law, these kinds of agents in contract law are; 1) General Agent 2) Special Agent 3) Mercantile Agent

What is an agent in a contract?

An agent is a person authorized to act on behalf of another person. The party an agent is authorized to act for is known as the principal. A principal-agent relationship can either be intentionally created or created by implication through one's actions. For further information, see Agency Law.

What are the five types of agents?

The five types of agents include general agent, special agent, subagent, agency coupled with an interest, and servant (or employee).

Conclusion

Kinds of agents in contract law have been discussed in this article. Majorly, there are 3 types of agents in contract law, these are; 1) General Agent, 2) Special Agent, and 3) Mercantile Agent.

Referred Books:

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