BANKING AFFAIRS

Detailed explanation-1: -According to section 185 of the Indian Contract Act, 1872, no consideration is necessary to create an agency.

Detailed explanation-2: -No consideration is necessary to create an agency. Thus contract of agency is an exception to general rule contained in s 25 ( no contract can be valid without consideration.

Detailed explanation-3: -"No consideration is necessary to create an agency". (a) Express Appointment-An agency is created by express appointment when the principal appoints the agent by express agreement with the agent. This express agreement may be an oral or written agreement between the principal and the agent.

Detailed explanation-4: -According to section 185 of the Act, no consideration is needed to establish an agency contract. In most cases, an agent is paid by commission for services rendered, although no payment is required at the time of the appointment.

Detailed explanation-5: -Contract of agency: Section 185 specifically states that no consideration is necessary to create an agency. Thus, when a person is appointed as an agent, his appointment is valid even if there is no consideration.