An Agent represents the principal, holding the power to bind the principal contractually in dealings with third parties.
1. Definitions: Section 182
Under Section 182, 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".
- Competency (Section 183 & 184): The principal must be of the age of majority and of sound mind. Anyone can become an agent, but a minor agent cannot be held personally responsible to the principal.
- No Consideration (Section 185): No consideration is necessary to create an agency.
2. Creation of Agency
- Express Agreement: Created by written or spoken words.
- Implied Agreement: Arising from conduct or relationship (e.g., agency by estoppel or holding out).
- Agency by Necessity: In an emergency, a person can act as an agent to protect another's goods if communication is impossible (Section 189).
3. Agency by Ratification (Sections 196 to 200)
Where acts are done by one person on behalf of another but without his prior knowledge or authority, the principal may elect to ratify (approve) or disown such acts. If ratified, the act has the same effect as if it was done with prior authority.
Essentials of Valid Ratification:
- The principal must be in existence and competent at the time the contract was made.
- Ratification must be of the whole transaction (Section 199); the principal cannot ratify only the beneficial parts.
- Ratification must not cause damage or terminate the rights of third parties (Section 200).