Definition of Agent and Principal as contained in section 182 of the Contract Act, 1872

Definition of Agent and Principal as contained in section 182 of the Contract Act, 1872 is given below

Agent is a person employed to do any act for another or to represent another in dealing with a third persons. The person for whom such act is done, or who is so represented, is called the Principal.

Explanation

The legal relation between a merchant in one country and a commission agent in other is that of principal and agent, and not seller and buyer, though this is consistent with the agent and principal, when the agent consigns the goods to the principal, being in a relation like that of seller and buyer for some purposes. A merchant, therefore, in this country who orders goods through a firm of commission agents in Europe cannot hold the firm liable as if they were vendors for failure to deliver the goods. And the result is the same if the goods are ordered through a branch in this country of a firm of commission agents in another country. For the same reason, where a commission agent buys goods for a merchant at a price smaller than the limit specified in the indent, he cannot charge any price higher than that actually paid by him, except in the case of a custom to the contrary. An agent may have, and often has, in fact, a large discretion, but he is bound in law to follow the principal's instructions provided they do not involve anything lawful. To this extent an agent may be considered it’s a superior kind of servant; and a servant who is entrusted with any dealing with third persons on his master's behalf is to that extent an agent. But a servant may be wholly without authority to do anything as an agent, and agency, in the case of partners, even an extensive agency, may exist without any contract of hiring and service. ]

 Form of business

o  Acting as “Modaraba Company” under the provision of the Modaraba Companies and Modaraba (Floatation and Control) Ordinance, 1980.  

[The definition of modaraba company as contained in Modaraba Ordinance, 1980 is given below:

Modaraba Company means a company engaged in the business of floating and managing modaraba. The definition of the modaraba is given hereunder. Modaraba means a business in which a person participates with his money and another with his efforts or skill or both his efforts and skill and shall include Unit, Trust and Mutual Fund by whatever name called.

Modaraba certificate and Modaraba fund have also been defined in this Ordinance; the said definitions are also given here under for ready reference.

Modaraba Certificate: means a certificate of definite denomination issued to the subscriber of the modaraba acknowledging receipt of money subscribed by him.

o   Contracting for public and private loans and negotiating and issuing the same. 

o   The effecting, insuring, guaranteeing, underwriting, participating in managing and carrying out of any issue public or private, Government, municipal or other loans or of shares, stock debentures, (debenture stock or other securities) of any company, corporation or association and the lending of money for the purpose of any such issue;

o   Carrying on and transacting every kind of guarantee and indemnity business;

o   Purchase or acquisition in the normal course of its banking business of any property, including commodities, patents, designs, trade marks and copyrights with or without buy-back arrangements by the seller, or for sale in the form of hire-purchase or on deferred payment basis with mark-up or for leasing or licensing or for rent sharing or for any other mode of financing

o   Managing, selling and realizing any property which may come into the possession of the company in satisfaction or part satisfaction of any of its claims;

o   Acquiring and holding and generally dealing with any property or any right, title or interest in any such property which may form security or part of the security for any loans or advances or which may be connected with any such secure.

o   Undertaking and executing trusts;

We shall continue our discussion on this topic in the next Lesson.