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CONTRACT OF AGENCY
Sub-Agent
BY –
SURBHI WADHWA
Assistant Professor (Law)
Jiwaji University,
Gwalior
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Sub-agent
• A sub-agent is the agent of
the original agent. He is a
person employed and
acting under the control of
the original agent in the
business of agency.
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• The relation of the sub-
agent to the original agent
is as between themselves,
that of agent and
principal. A sub-agent is
bound by all the duties of
an ordinary agent.
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• The general rule is
‘delegatus non potest
delegare’, i.e., an agent to
whom another has
delegated his own
authority, cannot delegate
that authority to a third
person.
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• This rule is based on the
principal that agency is a
contract based on trust
and mutual confidence
between the parties.
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• A principal may have
mutual confidence in his
agent but not in the
subsequent sub-agent
appointed by the agent.
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• Sub-agency is not
generally recognized but
there are two exceptions
to the rule–
• Where the ordinary custom
of trade permits
employment of a sub-
agent, or
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• When the nature of
agency demands that
employment of a sub-
agent is necessary by the
agent.
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• Section 190 of the Act
provides that an agent
cannot lawfully employ
another to perform acts
which he has expressly or
impliedly undertaken to
perform personally,
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• unless by the ordinary
custom of trade a sub-
agent may, or, from the
nature of the agency, a
sub-agent must, be
employed.
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• Section 191 of the Act
defines sub-agent as a
sub-agent is a person
employed by, and acting
under the control of, the
original agent in the
business of the agency.
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• Section 192 of the Act
provides that where a sub-
agent is properly
appointed, the principal is,
so far as regards third
persons, represented by
the sub-agent,
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• and is bound by and
responsible for his acts, as if
he were an agent
originally appointed by the
principal.
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• The agent is responsible to
the principal for the acts of
the sub-agent.
• The sub-agent is
responsible for his acts to
the agent, but not to the
principal, except in cases
of fraud or wilful wrong.
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• Section 193 of the Act
provides that where an
agent, without having
authority to do so, has
appointed a person to act
as a sub-agent,
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• the agent stands towards
such person in the relation
of a principal to an agent,
and is responsible for his
acts both to the principal
and to third persons;
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• the principal is not
represented, by or
responsible for the acts of
the person so employed,
nor is that person
responsible to the
principal.
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• Section 194 of the Act
provides that where an
agent, holding an express
or implied authority to
name another person to
act for the principal in the
business of the agency,
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• has named another person
accordingly, such person is
not a sub-agent, but an
agent of the principal for
such part of the business of
the agency as is entrusted
to him.
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For examples,
• ‘A’ directs ‘B’, his solicitor,
to sell his estate by
auction, and to employ an
auctioneer for the purpose.
‘B’ names ‘C’, an
auctioneer, to conduct the
sale. ‘C’ is not a sub-agent,
but is A’s agent for the
conduct of the sale.
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• ‘A’ authorizes ‘B’, a
merchant in Calcutta, to
recover the moneys due to
‘A’ from C & Co. ‘B’
instructs ‘D’, a solicitor, to
take legal proceedings
against C & Co. for the
recovery of the money. ‘D’
is not a sub-agent, but is
solicitor for ‘A’.
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• Section 195 of the Act
provides that in selecting
such agent for his principal,
an agent is bound to
exercise the same amount
of discretion as a man of
ordinary prudence would
exercise in his own case;.
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• and, if he does this, he is
not responsible to the
principal for the acts or
negligence of the agent so
selected.
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For examples,
• ‘A’ instructs B, a merchant,
to buy a ship for him. B
employs a ship-surveyor of
good reputation to choose
a ship for ‘A’. The surveyor
makes the choice
negligently and the ship
turns out to be
unseaworthy and is lost. ‘B’
is not, but the surveyor is,
responsible to ‘A’.
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• ‘A’ consigns goods to ‘B’, a
merchant, for sale. ‘B’, in
due course, employs an
auctioneer in good credit
to sell the goods of ‘A’,
and allows the auctioneer
to receive the proceeds of
the sale.
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• The auctioneer afterwards
becomes insolvent without
having accounted for the
proceeds. ‘B’ is not
responsible to ‘A’ for the
proceeds.
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