IRREVOCABLE AGENCY

by • 09/06/2013 • GeneralComments (0)545

Q.11    Explain Irrevocable Agency.

Ans:    IRREVOCABLE AGENCY

The term ‘irrevocable Agency’ means an agency, which cannot be revoked or terminated by the principal.

CIRCUMSTANCES WHEN THE AGENCY IS IRREVOCABLE [SECTION 202 & 204]

The circumstances when the agency is irrevocable have been given below:

 

(a)        No Termination of Agency counted with Interest [Section 202]

Where the agent has himself an interest in the property, which forms the subject matter of the agency, the agency cannot, in the absence of an express, be terminated to the prejudice of such

interest.

EXAMPLE:

X consigned 100 bags of wheat to Y who has advanced Rs 10,000/= toX. X authorized Y to sell the wheat and to pay himself Rs 10,000/= out of the proceeds of wheat/Later on X directed Y not to be selling the wheat- Ignoring X’s direct, Y sold the wheat to recover. Rs-10,000/=. X could not revoke his authority because the agency was coupled with interest. Hence,; Y could sell the wheat. .

 

(b)        WHERE THE AGENT HAS PARTLY EXCERISED HIS AUTHORITY [SECTION 202]

The principal cannot revoke the authority given to his agent after the authority has been party exercised, so far as regards such acts and obligation as arise from acts already done in the agency. Thus the principal cannot revoke the agent’s authority for the acts already done.

EXAMPLE

A authorized B to buy 1,000 bales of cotton, on account of A, and to pay for it out of As money remaining in JB’s hands. B buys 1,000 bales of cotton in A’s name, and so as not to render himself personally liable for the price. A cannot revoke Brs authority to pay for the cotton.

(c)        WHERE THE AGENT HAS INCURRED A PERSONAL LIABILITY:

The principal cannot revoke the agent’s authority, for the authorized acts in respect of which the agent has already incurred a personal liability. 

EXAMPLE

A authorized B to buy 1,000 bales on account of A, and to pay for it out of A’s money remaining in B’s hands buys, 1,000 bales of cotton in1 his own name, so as to make himself personally liable for the price. A cannot revoke B’s authority so far as regards payment for the cotton.

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