Principal In Contract Act
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FAQ
Agency is a relationship between a principal and an agent in which the principal confers his or her rights on the agent to act on principal's behalf. Such a relationship is based on an agency contract. The rights and duties of the agent and principal are in ance with the express or implied terms of the contract.
( ACT NO. IX OF 1872 ) An "agent" is a person employed to do any act for another or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the "principal".
A principal is liable for contractual arrangements entered into by the principal with third parties if the agent had express, implied or apparent authority to enter into those agreements. Most agents do not work for free, even though one can become an agent by agreeing to do something gratuitously.
Common examples of the principal-agent relationship include hiring a contractor to complete a repair on a home, retaining an attorney to perform legal work, or asking an investment advisor to diversify a portfolio of stocks.
