BACHELOR OF BUSINESS ADMINISTRATION

Detailed explanation-1: -The principal appoints or employs an agent under the contract of agency. Thus, an agent is the link that connects the principal to the third parties. An agent binds the principal by his acts. In other words, a principal is responsible for the acts of the agent to the third parties.

Detailed explanation-2: -In a contract of agency, a person appoints another to act on his behalf with the third party it is called ‘Agency’. According to Section 183 of the said Act, Principal must be competent to contract. Any person may be an agent (Section 184).

Detailed explanation-3: –As between the principal and third person any person may become an agent, but no person who is not of the age of majority and of sound mind can become an agent, so as to be responsible to his principle according to the provisions in that behalf herein contained.

Detailed explanation-4: -If the principal is bound by the acts of his agent under the doctrine of apparent authority or agency of necessity, the principal is contractually liable to the third party. b. A disclosed principal may be liable for money paid to his agent in respect of transactions conducted by the agent within his authority.

Detailed explanation-5: -Position of Third Party According to Section 231 of Indian Contract Act, 1872, a third person has a right to enforce a contract against both the agent as well as the principal. The third party can proceed with a suit against the Principal for any loss suffered as a result of the principal’s failure to perform the duty.