Agency, Various ways in which an agency may be created

1. AGENCY

2. 
“Whenever a person has the authority to act
on behalf of the other and to create
contractual obligation between that other
and the third persons”

3. 
An agent is any person who is employed to
do any act for another or to represent
another in dealing with other persons. The
person for whom such Act is done is called
Principal.

4. 
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Agency by Express Agreement
Agency by Implied Agreement
Agency by ratification
Agency by Operation of Law

5. 
Agency may be created by an express
agreement i.e. by words (oral or written).

6. 
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Agency may be created by an implied
agreement i.e. by conduct or through Acts.
1. Agency by Estoppel
2. Agency by Holding Out
3.Agency by Necessity

7. Agency by Estoppel
Agency by Estoppel means that when an
agent has without authority done Acts or
incurred obligations to third person on behalf
of his principal, the principal is bound by Act
or obligation( if he has by words or conduct
induced third person to believe that such Act
were within the scope of authority)


8. Agency by Estoppel
For eg- X tells Y in the presence of Z that he is
Y’s agent. Y didn’t deny and kept quiet. Later
on Z entered into a contract with X ( believing
him to be his agent). Now, Y is bound by the
contract even though no agency existed in
actual.


9. Agency by Holding Out
In this case, there is prior positive conduct
of the principal which indicates that a certain
was already his agent.


10. Agency by Holding Out
For eg- P allows his servant habitually to
purchase goods for him on credit from T and
pays for them. On one occasion, he pays his
servant cash to purchase the goods. The
servant misappropriates the money and
purchases goods on credit from T. T can
recover the price from P as he had held out
his servant as his agent on prior occassions.


11. Agency by Necessity
Circumstances sometimes force a person to
Act on behalf of another without ant
expressed authority from him. It is the case of
Agency by necessity.
The following conditions must by satisfied:1. It must be impossible to get Principal’s
instruction.
2. Actual necessity must be there.
3. The agent must be honest in his Act
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12. 
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Ratification means subsequent adoption and
acceptance of an Act originally done without
instructions or authority. It mean validity
made from past time.
EFFECTS OF RATIFICATION
if the Acts are ratified than the same effects
will follow as if they had been performed with
authority

13. 
Agency by Operation of Law sets to arrive
where the law treats one person as a agent of
another.
For eg- In case of partnership.