An “agent” is a person employed to do any act for another, or to represent another in dealing with third persons. The person for whom such an act is done, or who is so represented, is called the “principal”. Section 182 of the act defines the terms “Agent” and “Principal”.
Rights of an Agent
- Right to Receive Remuneration: According to Section 219 of the Indian Contract Act, an agent is entitle to his remuneration. But Section 220 of the said act says that, an agent who is guilty of misconduct in the business of an agency is not entitled to any remuneration in respect of that part of the business which he has misconducted.
- Right of Lien (Section 221): Agent’s lien on principal’s property- In the absence of any contract to the contrary, an agent is entitled to retain goods, papers and other property, whether movable or immovable, of the principal received by him, until the amount due to himself for commission, disbursements and services in respect of the same has been paid or accounted for to him.
- Right to Indemnity: Agent to be indemnified against consequences of lawful acts. Indemnity means promise make good the loss. According to Section 222 of the Indian Contract Act, 1872 “The employer of an agent is bound to indemnify him against the consequences of all lawful acts done by such agent in exercise of the authority conferred upon him. Illustrations: B, at Singapore, under instructions from A of Calcutta, contracts with C to deliver certain goods to him. A does not send the goods to B, and C sues B for breach of contract. B informs A of the suit, and A authorities him to defend the suit. B defends the suit and is compelled to pay damages and costs and incurs expenses. A is liable to B for such damages, costs and expenses.
- Right to Compensation: According to Section 225 of the said act, an agent is entitled to claim compensation for the injuries suffered as a consequence or want of skill of the principal. Section 225 reads as follows- “The principal must make compensation to his agent in respect of injury caused to such agent by the principal’s neglect or want of skill. Illustration: A employs B as a bricklayer in building a house, and puts up the scaffholding himself. The scaffholding is unskillfully put up, and B is in consequence hurt. A must make compensation to B.
- Right to Retain Sums (Section 217 and 218): The agent has a duty to pay to his principal all sums received on principal’s account. But he also has a right to retain, out of any sums received on account of principal in the business of agency, all money due to himself in respect of advances made or expenses properly incurred by him in conducting such business and also such remuneration as may be payable to him for acting as agent. Similarly, when an agent sells his principal’s goods, he may detain the money received, for his remuneration on account of the goods sold by him. Such right can be exercised by an advocate also but lien must be confined to the costs incurred in that particular case.