Law Relating to Agency under Indian Contract Act

 Q.11. Define the term Agency, Principal and agent.  What is a different kind of agent?

What is Agency?

 

When one party delegates some authority to another party whereby the latter performs his actions in a more or less independent fashion, on behalf of the first party, the relationship between them is called an agency. Agency can be expressed or implied. Chapter X of the Indian Contract Act, 1872 deals with the laws relating to Agency. It is important to know the law relating to agency because nearly all business transactions worldwide are carried out through agency. All corporations, big or small, carry their work out through an agency. Therefore, laws relating to the agency are an important area of Business Law. Relationships relating to the principal and agent involve three main parties: The Principal, the Agent, and a Third Party.

An "agent" is a person employed to do any act for another or represent another in dealing with a third person. The person for whom such act is done, or who is so represented, is called the principal". (Sec. 182).

 

In an agency one person (principal) employs another person agent) to represent him or to act on his behalf, in dealing with a third person. If an agent has been duly authorised to do an act on behalf of the principal, the principal is bound by such act with the third party as if the principal had done the act himself. If my agent sells my house to a third party, I am bound by the sale in the same way as if I have myself contracted to sell the house to the third party. Explaining the definition of the agent as stated in section 182, Dhavan J. observed in the case of Loon Karan v. John and Co., AIR 1967 All 308: "According to this definition, an agent never acts on his own behalf but always on behalf of another. He either represents his principal in any transactions or dealings with a third person or performs an act for the principal. In either case, the act of the agent will be deemed in law to be not his own but of the principal's. The crucial test of the status of an agent is that his acts bind the principal."

The use of the word "agent" for a person is not conclusive proof of the fact that there is an agency in law between the parties. "The court must examine the true nature of the agreement and the subsequent dealings between the parties and then decide whether it established a relationship of the agency under the law. It is a common experience that the word 'agent' is frequently used to describe a relationship which is not an agency in law."

Different kinds of Agents

 

(1) Auctioneers.-An auctioneer is an agent whose business is to sell goods or other property by public auction, ie, by open sale. He is a mercantile agent within the meaning of the Sale of Goods Act. The authority vested in him is to sell the goods only and not to give warranties on behalf of the seller, unless expressly authorised in that behalf. If an auctioneer gets the possession of the goods with the consent of the owner, even though he has not been given the right to sell, an innocent buyer from him will get a good title in respect of those goods.

 

(2) Factors.-A factor is a mercantile agent who is entrusted with the possession of the goods for the purpose of sale. He has also the power to sell goods on credit and also to receive the price from the buyer. A factor has the right of a general lien over the goods belonging to his principal, which are in his possession, for the general balance of the account.

 

(3) Brokers.-A broker is an agent who has the authority to negotiate the sale or purchase of goods on behalf of his principal, with a third person. Unlike factor, he himself has no possession of the goods. He gets his commission whenever any transaction materialises through his efforts.

 

(4) Del Credere Agents.-Generally, an agent is not answerable to his principal for the failure of the third party to perform the contract. A del credere agent constitutes an exception to this rule. He is a mercantile agent, who, on payment of some extra commission, known as del credere commission, guarantees the performance of the contract by the third person. On the failure of the third person to pay, the principal can make the del credere agent liable. His liability, like that of a surety, is secondary and the same arises if there is a default on the part of the third person.

Q. (b) What are the essential features of an Agency. Can a minor act as a principal or agent.

 1. The principal should be competent to contract. For the validity of a contract, the parties should be competent to contract. Since through an agent, a contract is to be created between the principal and the third person, it is necessary that both of these parties should be competent to contract. Section 183 provides that any person who is of the age of majority and of sound mind may employ an agent.

 

2. The agent may not be competent to contract.---The Capacity of an agent could be looked at from two angles : (1) the Capacity of the agent to act on behalf of the principal so as to bind the principal to the third person, and (ii) Capacity of the agent to bind himself by a contract between himself and the principal.

So far as the agent's capacity to bind the principal and the third person is concerned, for that, any person may become an agent, even though he is not competent to contract. (Sec. 184). The agent is only a connecting link, which creates a contract between two parties who are competent to contract, and therefore, he need not to be competent to contract.

So far as the agent's capacity to bind himself to the principal is concerned, for that, it is necessary that the agent should be competent to contract. (Sec. 184). Thus, if an agent is a minor, through him a valid contractual relationship will be created between the principal and the third person, though such an agent himself will not be responsible for his acts toward his principal.

3. No consideration is necessary to create agency. According to section 185, no consideration is necessary to create an agency. From the fact that the principal agrees to be bound by the act of the agent, and he has a duty to indemnify the agent, sufficient consideration is presumed, and, therefore, no other consideration is necessary for such a contract.

Q (c) Discuss the rights and liabilities of an undisclosed principal of an agent and the third party to the contract, in case of such an undisclosed principal.

Ans.  The ascertainment of rights and liabilities of an agent and principal is done on the basis of:

 

(a) disclosure regarding the name and existence of the principal by the agent,

 

(b) non-disclosure of the name and existence of the principal.

 

 Where the existence of the principal is disclosed, Section 226 applies. The acts done by an agent within the course of his employment make the principal liable in a similar fashion as the act has been done by the principal himself.

The undisclosed principal is a person whose existence is not disclosed by the agent nor the representative character is expressed by the agent. In such transactions, the agent is personally liable for being a party to the contract. He may be sued or may sue the third party. In such cases, the principal has a right to come forward to attain his seat or position as an undisclosed party Section 230(2) clearly admits this provision and as an exception agrees that a presumption

Q (d) Distinguish between a sub-agent and a substituted agent and discuss their rights and liabilities.

Ans. (d).; Sub-Agent. Section 191 of the Act then says that a sub-agent is a person employed by and acting under the control of, the original agent in the business of the agency. If a sub-agent has been properly appointed, his acts and conducts bind the principal towards the third person. Section 192 of the Act provides:

 

"Where a sub-agent is properly appointed, the principal is, so far as regards third persons, represented by sub-agent, and is bound by and responsible for his acts, as if he were an agent originally appointed by the principal.

 

Agent's Responsibility For Sub-Agent - 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."

 

So there is a privity of Contract between

 

(i) Sub-Agent and Agent

 

(ii) Agent and Principal

 

Sub-agent is directly responsible to the agent and not to the Principal and the Agent is directly responsible to the principal, there is no direct contract between the sub-agent and the principal. When the principal appoints an agent to do some work and the agent prefers to get the work done from the sub-agents. It is the agent's duty to see that sub-agent is performing properly for any misconduct of the sub-agent, resulting in loss to the principal, the agent is liable. Section 193 of the Act then declares that if the agent has improperly delegated his authority to the sub-agent, then the agent is liable to the principal as well as to the third person with whom the sub-agent has made dealing.

 

Substituted Agent; Section 194 of the Indian Contract Act lays down

 

"Where an agent, holding an express or implied authority to name another person to act for the principal in business of the agency, has named another person accordingly, such person is not sub-agent but an agent of the principal for such part of the business of the agency as is entrusted to him."

Illustration A directs B his solicitor, to sell his estate by auction and to employ an auctioneer for this 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.

 

So Agent when having expressed or implied authority, can name a person to act on behalf of the principal, in his place such an agent will be a substituted agent and not a sub-agent. In selecting a substituted agent. Section 195 of the Act declares that Agent will exercise the same amount of discretion and care as a man of ordinary prudence would exercise in his own case if he does so then he will not be responsible to the principal for the acts of negligence of agent so selected.

Sub-agent and substituted agents distinguished

 

(i) A sub-agent is the agent's agent, whereas a substituted agent is the principal's agent in conducting the agency work. A sub-agent is responsible for his acts toward the agent, and the agent in his turn is responsible for the sub-agent's act to the principal. A sub-agent is not responsible to the principal, except in case of fraud or wilful wrong. A substituted agent is directly responsible to the principal for his acts.

 

(ii) After appointing a sub-agent, the agent continues to be responsible for the acts of the sub-agent towards the principal. An agent's responsibility, on the other hand, is over when he appoints a substituted agent. He goes out of the picture.

Q (e) Explain the relationship between the principal and agent?

Agent’s duties to Principal

An agent has 6 duties towards his Principal:

1.      He has to conduct the business of the Principal according to the directions of the Principal.(Sec 211)

2.      An agent is bound to conduct the business he is supposed to conduct with as much skill as a person on his position ordinarily holds. (Sec 212)

3.      An agent is supposed to show the relevant accounts to the Principal as and when the Principal demands.(Sec 213)

4.      An agent has the duty to communicate any difficulty whatsoever he may come across while doing the Principal’s business. He is supposed to perform due diligence in this regard.(Sec 214)

5.      If any material fact has been concealed or the business is not carried out in the manner that the Principal directed, the Principal can repudiate the contract between them.(Sec 216)

6.      If the agent carries out the business in the manner he wanted to perform it, rather than on the directions of the Principal, the Principal may claim from the agent any benefit he may have achieved through doing so.(Sec 217-18)

Principal’s duties to Agent

The Principal has 5 duties towards the Agent:

1. Right to Remuneration.-An agent is entitled to remuneration for the work of the agency done by him, but an agent's remuneration does not become due to him until the completion of the act assigned to him. This rule is subject to any special contract between the principal and the agent. (Sec. 219). If the agent's efforts are the effective cause of making the contract, he is entitled to his commission.

An agent, who is guilty of misconduct in the business of the agency, is not entitled to any remuneration in respect of that part of the business in which he has misconducted. (Sec. 220).

 

2. Right to retain sums.-The agent has a duty to pay to his principal all sums received on the principal's account. But he has a right to retain, out of any sums received on account of the principal, all sums of money due to himself in respect of advance made or expenses properly incurred by him in conducting such business, and also such remuneration as may be payable to him for acting as an agent. (Sec. 217).

 

3. Right of lien on principal's property.-In the absence of a contract to the contrary, an agent has a lien on the principal's property with him, until the commission, etc. due to him has been paid. (Sec. 221).

 

4. Right to be indemnified. The principal is bound to indemnify an agent against the consequences of all lawful acts done by such agent in the exercise of the authority conferred upon him. (Sec. 222). The agent is also entitled to indemnity against consequences of act done in good faith, even though the act causes an injury to the rights of third persons, for example, it is a tort. (Sec. 223).

 

If an agent commits a crime at the instance of the principal, the agent cannot claim indemnity from the principal against the consequences of the crime, even though the principal has expressly or impliedly, promised to indemnify him. (Sec. 224).

 

5. Right to compensation for damage due to principal's neglect. The principal has a duty to compensate his agent in respect of injury caused to such agent by the principal's neglect or want of skill. (Sec. 225).

 

Liability of Principal for Agent’s Fraud or Misrepresentation

According to Section 238, The Principal is liable for any fraud or misrepresentation made by his agent during the course of his business, as if the fraud or misrepresentation was done by the Principal himself.

Q (f) How agency is created?

An agency can be created by the following modes:-

 (1) By Actual Authority.-Authority to act on behalf of the principal may be conferred on the agent either expressly or impliedly. i.e., such authority may be either express or implied.

(i) Acts done with the principal's actual authority. A principal is bound by the acts done by his agent with his authority. The authority of the agent may be expressed or implied.

 

An authority is said to be expressed when it is given by words spoken or written. An authority is said to be implied when it is to be inferred from the circumstances of the case; and things spoken or written, or the ordinary course of dealing, may be accounted for circumstances of the case. (Sec. 187).

 

The extent of implied authority. An agent having the authority to do an act has the authority to do every lawful thing which is necessary in order to do such act. An agent having the authority to carry on business has the authority to do every lawful thing necessary for the purpose or usually done in the course of conducting such business. (Sec. 188). For instance, A is employed by B residing in London, to recover at Bombay a debt due to B. A may adopt any legal process necessary for the purpose of recovering the debt and may give a valid discharge for the same. [III. (a) to Sec. 188]. An agent employed to sell a horse has implied authority to give a warranty that the horse is sound, or an agent having been authorised to sell artificial manure has implied authority to warrant the proportion of its ingredients. If a buyer refuses to take delivery of a consignment of potatoes, and the seller sends his agent to take delivery of them at the destination and dispose them off "at any price he chooses", acceptance of a smaller amount by the agent from the same buyer in full payment, will bind the seller. The seller will not be entitled to recover any further amount from the buyer. (Ishaq v. Madan Lal).

 

If an L.I.C. agent is expressly prohibited from collecting the premium, and the rules also prohibit the same. collection of premium cannot be considered as necessary for or incidental to the effective execution of the express authority granted to him (Harshad v. L.I.C. 1997 S.C.)

Employer agreeing to collect Life Insurance Premium

 

A such employer who agrees to collect the LIC Premium from the salary of his employees and transmit it to the LIC is LIC agent for that purpose. If he fails to remit the collected premium he will be liable to pay compensation to the employee. The LIC will be liable in respect of the claim for an insurance policy. (DESU v. Basanti Devi, A.I.R. 2000 S.C. 43).

a person acts on his own account, such an act cannot be ratified by another person. For example, if A is asked by B to purchase wheat in the joint account, of A & B, but A purchases wheat on his own account only. Subsequently. B purports to ratify the act of A. Then the prices fall, and B refuses to be bound by the transaction. It has

 

(2) In a situation of Emergency. An agent can act on behalf of the principal in a situation of emergency.

Agent's authority in an Emergency.-An agent has authority in an emergency, to do all such acts for purpose of protecting his principal from loss as would be done by a person of ordinary prudence, in his own case, under similar circumstances. (Sec. 189).

 

(3) By Estoppels-A person may be liable as a principal because of his conduct, on the basis of the law of estoppel.

 Principal bound by estoppel. Sometimes, an agent has no authority to act on behalf of the principal, but the principal by his conduct creates an impression in the mind of the third person that the agent has an authority to act on his behalf. In such a case, the principal is liable towards the third person for the acts done by the agent, on the ground of the application of the law of estoppel. (Sec. 237). The basis of the action is what appears to the third person to be an authority, i.e., apparent or ostensible authority conferred on the agent.

 

(4) By Ratification.-Even though the agent's act has been done without the principal's prior authority, he may ratify such an act and make himself liable for the same.

 Principal bound by Ratification.-In an exceptional case, a principal may be bound by the act of the agent done without any kind of authority, and that is when the principal ratifies, Le.. accords subsequent approval to an act done without his authority. but on his behalf. When an act has been done without the principal's authority or knowledge, but on his behalf, he has an option either to disown the act, or to satisfy the same.

 

Essentials of valid ratification

1.      Act should be done on behalf of another.-For a valid ratification, it is necessary that the same has been done on behalf of the person who seeks to ratify the same. If a person acts on behalf of A, it cannot be ratified by B. Similarly, when a person acts on his own account, such an act cannot be ratified by another person. For example, if A is asked by B to purchase wheat in the joint account, of A & B, but A purchases wheat on his own account only. Subsequently. B purports to ratify the act of A. Then the prices fall, and B refuses to be bound by the transaction. It has

 

been held in Keighley, Maxsted & Co. v. Durant, that B is not bound by the transaction, as he could not ratify the act which was done by A on his account only, and not on B's behalf.

 

2. Principal should be in existence, and competent to contract. When the principal ratifies the act, its validity relates back to the time of doing of the act by the agent. The act is as valid as if done with the prior authority of the principal. It is, therefore, necessary that the principal must have been in existence, and also competent to contract, at the time the act purported to be ratified was done. For example, the promoters of a company enter into a contract on behalf of a company, which has not come into existence. After the company has been formed, it purports to ratify the contract. Then the company goes into liquidation. If the promoters are sued on the contract, they cannot say that now the company's liability had arisen by ratification, and their liability has come to an end. The company's liability did not arise as the company could not ratify the act, which was done at a time when the company was not in existence. The promoters will, therefore, be liable in respect of the contract. (Kelner v. Baxter).

 

If an agent purports to make a contract on behalf of a principal, who is incompetent to contract, e.g., a minor, such principal cannot validate the contract by a subsequent ratification. A minor's agreement is void ab initio, it cannot be validated by ratification.

 

3. Ratification with full knowledge of facts.-No valid ratification can be made by a person whose knowledge of the facts of the case is materially defective. (Sec. 198)

 

4. Ratification of the whole transaction.-A principal cannot ratify only those parts of the transaction which are favourable to him, and disown others. If he makes a ratification, it is deemed to be ratification of the whole act. (Sec. 199).

 

5. Ratified act should not be injurious to a third person. If ratification of an act done without the authority of a person would result in injury to the interest of a third person, the ratification would be invalid. (Sec. 200); For example, A holds a lease from B. terminable on three months' notice. C, an unauthorised person, gives notice of termination to A. The notice cannot be ratified by B, so as to be binding on A. [Ill. (b) to sec. 200)

 

6. Ratification within a reasonable time. For valid ratification, it is necessary that the same must be done within a reasonable time.

 

7. Ratification may be expressed or implied.-Ratification may be expressed or implied in the conduct of the person on whose behalf the acts are done. (Sec. 197); For example, A, without authority, buys goods for B. Afterwards, A sells them to C on his own account. B's conduct implies a ratification of the purchase made for him by A. [Ill. (a) to sec. 197].

 

Effect of Ratification: The doctrine of Relation Back

 

When, the principal ratifies an act, which has been done on his behalf but without his authority or knowledge, the same effects follow as if the act had been performed with the principal's prior authority. (Sec. 196). The date of making the contract by the agent, and not the date of ratification by the principal, is the date of entering into the contract. For example, the managing director of a company sells sugar to A. on behalf of the company, without any authority. on 1st January. The company tries to ratify the transaction on 1st February, but on 15th January, i.e., before ratification, A wants to withdraw his offer. A cannot withdraw the offer, because by subsequent ratification, the contract is deemed to have been made on 1st January, and there can be no withdrawal of offer after that. (Bolton Partners v. Lambert).

 

The position would be different if the agent purports to make the contract 'subject to ratification' by the principal. In such a case, the date of making of the contract is the date of ratification, and therefore, in such a case, there can be possibility of revocation of offer before ratification. (Watson v. Davies).

 

(5) By a Husband-wife relationship

 Agency in Husband-Wife relationship.-Agency in the relationship of husband and wife arises either by co-habitation or by necessity.

 

Agency by co-habitation.-A married woman cohabiting with her husband is presumed to have the power to pledge the credit of her husband for necessaries, Le., for such goods and services which may be required for the domestic use or which may be of use to herself, her husband or the children according to the condition of life of the family. The authority is presumed to be there when the husband and wife are cohabiting in a domestic establishment.

 

If the third person gives credit to the wife only, or when the husband revokes the authority by giving a notice to a third person, he is not bound by the wife's acts. When a man and a woman are living together and they appear to be husband and wife to a third person, the woman will be able to bind the man in the same way as if she was his wife.

 

Agency of Necessity.-Even if the husband and wife were not living together, for instance, when the husband had deserted the wife or when she was living separately because of some justifiable reason, under common law, she could pledge the credit of her husband. Such authority was presumed when neither the husband was supporting her nor had she the means of supporting herself. Such agency has been abolished in England by Matrimonial Proceedings and Property Act, 1970, as under this Act, the courts can award maintenance to the wife and children if the husband wilfully neglects to maintain them.

 

There is no such agency in India as a wife can claim maintenance under her personal law.

Q (g) How an agency can be terminated?

Section 201 mentions various modes of Termination of Agency:-

(1)   By revocation of authority,

(2)    By renunciation of the business of the agency by the agent,

(3)    By the completion of the business of the agency,

(4)    By the death or insanity of either the principal or the agent, or

(5)     By the insolvency of the principal.

 

Termination of Agency

When the relationship between principle and agent comes to an end, it’s known as termination of agency. Section: 201 – 210 deals with the termination of the agency.

Modes of termination: The provisions relating to the mode of the agency are defined under Section 201 of the Indian Contract Act – 1872. Section- 201 which provides termination of the agency is not comprehensive. We can divide the termination of the agency into two parts:

1. By the act of parties.

2. By the operation of law.

By the act of parties:

There are the following manners in which by the act of parties the agency can be terminated:

Revocation by mutual agreement: The agency of the contract can be terminated at any time by mutual agreement between the principal and the agent.

Revocation by the principal: Agency can be terminated by the principal by revoking the agent’s authority. The principal can revoke his agent’s authority when it has not been exercised by the agent reasonable, notice must be given for such revocation.

For Example- A empowers B to let A’s house. Afterwards, A lets it himself. This is an implied revocation of B’s authority.

Revocation by the Agent: The Agent also can revoke the agency by serving notice to the principle. As per section 206 of the Indian Contract Act 1872, the agent must give proper notice of renunciation/revocation of his principal. Otherwise, he shall be liable to make good for the loss to the principal for such notice.

By operation of law:

The following points are included in this:

By the completion of agency – After completion of agency work, an agency can be terminated for which agency is created.

Example: Mahesh employed Sachin as his agent to sell his house in China when the house was sold by Sachin, it automatically terminated the contract of agency between Mahesh and Sachin.

By the end of time- The agency can also be terminated by the end of time. If the agency is created for a specific period of time, then it expires after the time period is over.

Example: Anandam employs Anjana as a secretary for a period of 3 years at the end of the 3 years. The contract with the agency will come to an end after the specified period.

Death or insanity of principle or agent: Section 209 of the Indian Contract Act deals with it. If there is a death of the principal or agent, the business or agency of the firm may be terminated in this situation.

Insolvency of principle: To create an agency it is necessary to be competent but, if the principal becomes insolvent or bankrupt, the agency may be terminated.

Destruction of subject matter – If this subject of the agency is destroyed then the agency is closed.

For example – any agency is made for the sale of aeroplanes, if the aeroplane catches fire before the sale then, this agency can be terminated because aeroplanes are the subject of this contract.

The principal becomes a foreign enemy – If the principal becomes a foreign enemy, the contract of agency terminates.

Example: Mr. T is employed in America and Mr Sachin works as an agent for Mr. T in China for business, due to the war climate between the countries of principal and agent, the contract of the agency gets terminated.

Winding up of company or firm – A firm or company can be considered as a chief in an agency contract. If the company or firm is dissolved, then the agency is terminated.

Agent’s liability before termination of agency

Conducting the principal’s business according to the instructions given by the principal (section- 211): As per section 211, an agent shall act within the purview of the authority that his principal authorises him. Furthermore, he would strictly follow the instructions of his principal. However, in the absence of express instructions from his principal, he would follow the custom prevailing at the place where he performs his business, in a similar occupation.
Run the agency’s business competently and to punish the principal for loss of competence or incompetence in the case of his own negligence: Section 212 states that he shall work with due skill and diligence. Furthermore, where the nature of an agent’s profession requires him to possess a particular skill, then the agent must use the particular skill for the completion of work.

It is the duty of the agent to keep correct and impartial accounts and prepare them on proper notice.
An agent will not make any secret profit and he will disclose any additional profit made to the principal. When the principal realizes that the agent is making a secret profit, he can dismiss the agent without notice, recover the amount of the profit and also dissuade him from paying his remuneration. He can also cancel a contract where a third party is also involved in the fraud and recover damages.

Rendering the principal with proper and accurate accounts.

In contact with the principal and trying to receive his orders, using all due diligence.

To pay to the principal, all amounts received in the course of the company and without the prior permission of the principal from any work performed on the account of the latter.

Liability of principal and agent after termination:

• Duty to compensate the agent: An agency relationship may be repaid or be grateful. An agency’s terms can be put into an agency agreement. If the agency contract does not indicate the terms of compensation, the principal agent is obliged to provide appropriate compensation.

• Notice of revocation: The principal must give notice to the agent and the third party with the reason of termination. And this notice must be served to both parties.

• Revocation may be expressed or implicit: The revocation can be expressed or implicit.

• The principal and agent are free now and can enter any other contract differently.

Case laws related to the termination of agency:

1. R. Sayani v. Bright Bros (P) Ltd., AIR 1980 Mad 162
Where an organization is formed for a defined amount for time, the liability for premature termination will have to be compensated if the termination was not justified. No proper warning was given for the department’s premature decision. The agent got Rs. 4000 per month. The court was of the view that there should have been a warning of at least three months. In contrast, a reward of Rs. 12,000 was allowed.

2. Carter v. White, (1883) 2d 666: (1881–85) All ER Rape 921
A principal paid the money to his agent and gave him an agreed exchange bill with the authority to fill it in the drawer’s name. The principal died before he could finish the bill. His power to fill in the drawer's name was not considered terminated.

3. Sukhdev V. Command of the Command, (1998) 1 BC 403 (AP)
Through the termination of the name, an agency is automatically terminated. Where gas pumps were regulated by the agency for a specified time, it was assumed that the agent was obliged to evacuate the premises at the end of the period. There was no extension provision, nor was there any actual renewal clause.

4. Truman v. Lauder (1840) 11 AD and L589
A was working as an agent of B here. With B’s authority, all parties with whom A has entered into a contract in that undertaking have the right to hold B accountable until B informs the world that A’s authority has been taken away and that it makes sense. The question here was whether the agent intends to maintain the contract his account in a specific situation. The court rejected the claim that it was improper to ask the principal to tell the whole world that he had revoked his agent’s power of attorney and that he should not be expected to contact such a person Will with whom an agent was ready to deal. . And notify him of termination