Which is the Act that governs the
relationship between Agent and the Principal?
A separate Act, the Power of Attorney
Act 1882, deals with the Power of Attorney. It is a small Act with 5 sections.
But Indian Contract Act 1872 which deals with agency is applicable to the Power of Attorney, as the Power of Attorney Holder is an agent of the principal.
Who is an agent,
Principal ?
An agent is a person, employed to do
certain acts for another person or to represent such another person, while dealing
with third persons. The person on whose behalf the agent acts or whom the agent
represents is called the principal. The donor of Power of Attorney is the
principal and Power of Attorney Holder is the agent.
What are the
requirements of a Principal and agent ?
The principal should have attained
majority and should be of sound mind. Likewise, the person to be appointed as
agent should also be a major with sound mind. Though the Section 184 of Indian
Contract Act stipulates that as between principal and agent any person may
become an agent, but age and sound mind are important because a minor and a man
of unsound mind cannot be responsible for his Principal. Further, as between
the Principal and third person the act of an agent is deemed to be act of the
Principal. As such the Power of Attorney Holder and principal should be
majors and of sound mind.
Whether an agent
can appoint another agent? Whether a Power of Attorney Holder can appoint an
another Power of Attorney Holder?
The generally accepted principle is
that an agent cannot appoint another agent to do acts, which he has to perform.
So a power of attorney holder cannot appoint another power of attorney holder.
This is well expressed in maxim “delegate non potest delegare” which means a
person who is delegated with certain powers cannot delegate such powers to a
third person. But Section 190 of Indian Contract Act has provided certain
exceptions, whereby a sub-agent may be appointed in certain circumstances, a
power of attorney holder may appoint another power of attorney holder in
similar circumstances.
(1) The nature, custom of the trade is such
that it requires the appointment of sub-agents.
(2)The
terms of agency and the terms of power of attorney provide for appointment of
sub-agents.
Who is a Sub-Agent
?
A Sub-agent is a person employed to act under the control of original agent. The
relationship between original agent and sub-agent is that of principal and
agent.
What is the
relationship between the Original Principal and the Sub-Agent ?
A Sub-agent, if properly appointed in
terms of the agency to meet the
requirements of the business, binds the principal for his acts with the third
person. 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 and not to
the principal except in case of fraud or willful wrong.
What is the
responsibility of the agent who employs a sub-agent without authority ?
When an agent appoints a sub-agent
without proper authority, the agent is responsible for the acts of the
sub-agent to both the principal and to third person. The principal is not
responsible for the acts of the sub-agent, nor the sub-agent is answerable to
the principal.
Whether the
principal or donor can cancel the agency, power of attorney ?
The Principal or donor may cancel the
agency or power of attorney with due notice. Further proper notice should be
given to the public. Such agency also gets cancelled, when the work for which
agency was granted is completed, or by the death of the principal/donor, agent
or any of them becoming of unsound mind or insolvent.
However
if the agent himself has any interest in the property which is the subject
matter of agency, it cannot be cancelled, unless the agent agrees. Further, the
principal cannot cancel the agency, after the agent has partially exercised his
authority. In case of power of attorney given to sell the property, if the
power of attorney holder has entered into a sale agreement in accordance with
the terms of power of attorney, the donor cannot cancel the power of attorney
until the sale is completed; the sale agreement is binding on the principal.
More,
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