Relation of Principal/Agent, Sub-Agent and Substituted Agent, Indian Contract Act 1872

The relationship between principal, agent, sub-agent, and substituted agent is often seen in the context of agency law. Let’s break down each term and explain their relationships:

1- Principal: A principal is an individual or entity that authorizes another person, known as an agent, to act on their behalf in legal or business matters. The principal has the authority to delegate certain powers or responsibilities to the agent and can be held liable for the actions of the agent within the scope of their authority.

2- Agent: An agent is a person or entity appointed by a principal to act on their behalf and represent their interests. The agent has the authority to make decisions, enter into contracts, and perform tasks on behalf of the principal. The agent owes certain duties to the principal, such as loyalty, obedience, and accountability.

3- Sub-agent: A sub-agent is a person or entity appointed by an agent to assist in carrying out the duties assigned by the principal. The sub-agent acts under the authority and control of the agent and does not have a direct relationship with the principal. The sub-agent’s actions are considered the actions of the agent, and the agent remains responsible for their conduct.

4- Substituted agent: A substituted agent is a person or entity appointed by an agent to take over their role and perform the duties and responsibilities assigned by the principal. The substituted agent acts as a replacement for the original agent and assumes their authority and obligations. Once the substituted agent is appointed, the original agent’s authority typically terminates, and the substituted agent becomes directly accountable to the principal.

In summary, the principal-agent relationship forms the core of agency law, where the principal authorizes an agent to act on their behalf. The agent may appoint a sub-agent to assist them in fulfilling their duties, and the sub-agent operates under the agent’s authority. If the agent needs to be replaced or wants to delegate their authority, they can appoint a substituted agent who takes over their role and becomes directly accountable to the principal.

Books Recommended:     click to buy

1. Beatsen (ed.)-Anson’s Law of Contract : (27th Ed. 1998)

2. Anson-Law of Contract (1998), Universal, Delhi

3. Pollock and Mulla-Indian Contract Act

4. Avtar Singh-Law of Contract, Eastern Book Co.(Lucknow)

5. S.K.Kapoor- Samvidha Vidhi (Hindi)