What is the act that governs the rights and liabilities of principal and agent?
Asked by: Alexis Ernser | Last update: February 3, 2026Score: 4.6/5 (5 votes)
The body of law governing principal-agent rights and liabilities is the Law of Agency, primarily derived from common law principles, not a single statute, establishing fiduciary duties where an agent acts for a principal, defining their authority (actual, apparent) and mutual responsibilities like compensation, reimbursement, and confidentiality.
Is a principal liable for an agent's act?
The principal is liable on an agent's contract only if the agent was authorized by the principal to make the contract. Such authority is express, implied, or apparent.
Which of the following laws govern the rights and duties of the principal, the agent, and the persons with whom they deal?
Law of agency. The law of agency is an area of commercial law dealing with a set of contractual, quasi-contractual and non-contractual fiduciary relationships that involve a person, called the agent, who is authorized to act on behalf of another (called the principal) to create legal relations with a third party.
Is the act of agent the act of principal?
( ACT NO. IX OF 1872 )
An "agent" is a person employed to do any act for another or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the "principal".
What is the controlling rule of law governing the principal's liability for the agent's actions?
A principal is always liable for torts committed while the agent completes their official responsibilities. For torts occurring outside of official duties, the liability of the principal depends on whether the agent's tort occurred during a frolic or a detour.
Rights, Duties & Liabilities of Agent and Principal | Indian Contract Act | Simple explanation
What are the five common law fiduciary duties?
The five core common law fiduciary duties require a fiduciary (like an agent or director) to act with Loyalty (putting the principal first), Obedience (following lawful instructions), Care/Skill (acting prudently), Disclosure (revealing material facts), and Accounting (keeping accurate records and not profiting secretly). These duties ensure trust and protection for the person or entity the fiduciary serves, emphasizing utmost good faith and avoiding conflicts of interest.
What are the rights, duties, and liabilities of an agent and principal?
Right to Indemnification: Agents have the right to be indemnified by the principal for any losses or liabilities incurred while acting within the scope of their authority. This means that the principal is responsible for covering any legal or financial consequences arising from the agent's actions.
What is Section 184 of the Contract Act?
Section 184 | Indian Contract Act, 1872 | Law Commission of India Reports | Law Library | AdvocateKhoj. Section 184 permits a minor (as well as a person of unsound mind) to become an agent as between the principal and third persons without being responsible to his principal.
What are three types of agent authority?
Three types of authority may bind the principal: (1) express authority—that which is actually given and spelled out, (2) implied authority—that which may fairly be inferred from the parties' relationship and which is incidental to the agent's express authority, and (3) apparent authority—that which reasonably appears ...
What is Section 237 of the Contract Act?
When an agent has, without authority, done acts or incurred obligations to third persons on behalf of his principal, the principal is bound by such acts or obligations, if he has by his words or conduct induced such third persons to believe that such acts and obligations were within the scope of the agent's authority.
What is the law that governs the relationship between a principal and his or her agent?
Agency law encompasses the legal consequences of consensual relationships in which one person (the “principal”) manifests assent that another person (the “agent”) shall, subject to the principal's right of control, have power to affect the principal's legal relations through the agent's acts and on the principal's ...
What are the rights and duties of a principal?
The role of the Principal is to provide leadership, direction and co-ordination within the school. The Principal's main focus should be to develop and maintain effective educational programs within his/her school and to promote the improvement of teaching and learning with his/her school.
Who of the following governs the rights and duties of agents?
A principal incorporates a right to sue his agent for damages just in case of breach of duty by the agent. The duties of agents are: 1. As per section 211, an associate agent shall act at intervals the scope of authority that his principal confers upon him.
Is a principal liable for the agent's actions even when acting outside the scope of employment?
It affirmed that for a principal to be liable for an agent's willful act, the act must be committed within the scope of the agent's employment and in furtherance of the principal's business, even if it is an abuse of authority.
What is vicarious liability of principal and agent in tort law?
Vicarious liability arises when a principal is answerable for the act of an agent in the course of its business. It most often comes up in an employment context. The employer is vicariously liable for the employee, by the operation of tort law.
What law governs an agency relationship?
Agency law governs the legal relationship between two parties in which one gives the authority to act on behalf of the other. The party who acts for the other is an agent. The party that gives the agent authority is the principal.
What are the three types of authority by which an agent may act on behalf of a principal?
Such authority is express, implied, or apparent. Express means made in words, orally or in writing; implied means the agent has authority to perform acts incidental to or reasonably necessary to carrying out the transaction for which she has express authority.
What are the three types of agents?
In general, there are three types of agents: universal agents, general agents, and special agents.
What are the 4 components of agency?
The elements of the contract of agency are: (1) consent, express or implied, of the parties to establish the relationship; (2) the object is the execution of a juridical act in relation to a third person; (3) the agent acts as a representative and not for himself; (4) the agent acts within the scope of his authority.
What is Section 69 of the contract Act?
Section 69 provides that if a person pays a debt or obligation that another is legally bound to pay, and the payer is "interested" in the fulfillment of that obligation, then the payer is entitled to reimbursement from the person who was originally responsible.
What is Section 17 of the contract Act?
Section 17(1) of Indian Contract Act, 1872 states that when someone makes a false statement about a material fact or lends secrecy to it, it becomes fraud to the extent that it affects in some way the contract. For example, A sells land to B, saying that it isn't mortgaged, when in fact it is.
What is section 13 of the contract Act?
Section 13 defines consent as when two or more persons agree upon the same thing in the same sense.
What is Section 184 of the Indian Contract Act?
Section 184. "Who may be an agent". - As between the principal and third person any person may become an agent, but no person who is not of the age of majority and of sound mind can become an agent, so as to responsible to his principle according to the provisions in that behalf herein contained.
What are the 5 types of agents?
The 5 main types of Artificial Intelligence (AI) agents, categorized by increasing intelligence, are Simple Reflex Agents, Model-Based Reflex Agents, Goal-Based Agents, Utility-Based Agents, and Learning Agents, each handling complexity differently, from fixed rules to self-improvement through experience.
Can agents be liable for principal?
The agent is personally liable for his wrongful acts and must reimburse the principal for any damages the principal was forced to pay, as long as the principal did not authorize the wrongful conduct.