Types of Agents

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 act is done, or who is so represented, is called the “principal”.

As between the principal and third persons, any person may become an agent, but no person who is not of the age of majority and sound mind can become an agent, so as to be responsible to the principal according to the provisions in that behalf herein contained. No consideration is necessary to create an agency.

The authority of an agent may be express or implied. An authority is said to be express when it is given by words spoken or written. An authority is said to be implied when it is to be inferred from the circumstances of the case; and things spoken or written, or the ordinary course of dealing, may be accounted circumstances of the case.

Agents can be classified in various ways:

Special Agents: Agent appointed for a particular task only. The agency in such cases lasts for a specific period of for a particular type of job or work. For example… a property dealer appointed as an agent for a sale of a property is authorize his rights in regards to that property only and that too till its sale or revocation of agency by the principal.

General Agents: As the name suggests, the agent has a general authority in such a case. To elaborate, we could say a general agent is one who has authority to do all the acts (usually related to business or Trade) in the interest of his principal. A general agent has a implied authority to bind his principal by doing various acts necessary for carrying on the business of his principal.

Universal Agents: Universal agent is practically a general agent with very extensive rights. We can say that an universal agent is a substitute of principal for all those transactions where in principal cannot participate. We rarely find universal agents in business world today, however in personal life, a wife, son or a very close friend or relative could become a universal agent. For example: when a person leaves his country for a long time, he may appoint his son as his universal agent to act on his behalf in his absence.

Co-Agents: This happens when a principal appoints two or more person as agents jointly. Their authority is joint when nothing is mentioned. It implies that all co-agents concur in the exercise of their authority unless their authority is fixed or unless circumstances reveal any intention to the contrary. But when their authority is several, any other of the co-agents can act without the concurrence of the other.

Sub-Agents: In the language of law, a sub-agent would be “a person employed and acting under the control of the original agent in the business of the agency “.  In simple words, sub-agent is an agent of the original agent. As far as third party is concerned, principal can be held liable for the acts of sub-agent in certain cases like fraud etc. however in general, agent is responsible to the principal for the acts of sub-agent.

Substituted Agents: Substituted agent is almost same as a co-agent or sub-agent. Sections 194 and 195 deals with substituted agents. It states “when an agent holding on express or implied authority to name another person to act for and on behalf of his principal in his business, such agent is know as substituted agent. There are certain differences between the two, which could be better understood by the way of following illustration: Mr. RR authorizes Mr. YY, who is a businessman in Pune, to recover the money due to RR from ABC Company. YY, in turn, instructs NN, a solicitor, to take necessary legal actions and recover the dues. Here, NN is not a sub-agent but a solicitor for R.

To elaborate more on points of distinction between sub-agents and co-agents we can have following arguments:

  • A substituted agent acts under the direct control his principal where as sub-agent works under the original agent.
  • An agent does not delegate any part of his tasks or duties to a substituted agent, whereas as he does that to a sub-agent.
  • In case of a substituted agent, there is always a privacy of contract between the principal and the substituted agent, both can sue each other, however a sub-agent is not directly answerable to the principal, they can’t sue each other, however both can sue the agent.

Other classification of agents is as follows:

Factor: As per the section 2 of sale of goods act, there is an agent known as Mercantile Agent. As the name suggest he is the one who works for the business (merchandize) of the principal. A Factor is one type of a mercantile agent who sells goods on behalf of his principal. He has wide authority and discretionary powers to sell goods upon such terms and conditions as he thinks proper. He in broader terms relieves his principal from the burden of his work. If a factor does any act which is beyond his authority, but which is within the scope of his apparent authority, then his principal is bound by such act.

Broker: A broker is a special type of mercantile agent who acts as a middleman between the buyer and the seller. We can say that he is employed to bring about contractual relationship between the principal and the third party. He usually gets commission for the work performed. His function ends when he brings the two parties together. He is never in possession of the subject, therefore cannot exercise the right of lien.

Auctioneer: Auction is usually a public sale of goods made in the highest of several bidders. An auctioneer is a mercantile agent who is appointed to sell goods on behalf of principal, compensated in terms of commission.

Commission Agents: A commission agent is generally, appointed for selling or buying goods on behalf of his principal. Such types of agents belongs to a somewhat indefinite class of agents. He/She tries to secure buyer for a seller of a goods and sellers for a buyer of goods and receives a commission in return for his work on the actual sales price.

Del Credere Agents: A Del Credere agent is a mercantile agent who is employed to sell goods on behalf of his principal. He undertakes to guarantee the payment of dues in consideration for an extra commission. We can say that besides being a mercantile agent a del credere agent finds himself into the shoes of a guarantor as well.

Forwarding Agents: Forwarding agents render services of collecting goods from their principals and forwarding the same to shipping companies. As foreign trade procedures are more complex that the procedures of home trade, the service of forwarding agents hence helps the producers and exporters to a great extent.

Clearing Agents: As forwarding agents help the exporters of goods, clearing agents help the importers of goods. They complete various complicated customs and exchange formalities on behalf of the importers who appoint them.

Indenting Agents: An indenting agent is a commission agent who procures a sale or purchase on behalf of his principal with a merchant abroad for a commission at the rate mentioned in the indent. He is an important mercantile agent who facilitates the distribution of goods at international level.