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Section 194, Contract Act 1872: Relation Between Principal & Person Duly Appointed By Agent To Act In Business Of Agency

Section 194 under the Chapter X (Agency - Appointment and authority of agents) of the Contract Act, 1872 of India - 'Relation between principal and person duly appointed by agent to act in business of agency', is reproduced hereunder:—

“When an agent, holding an express or implied authority to name another person to act for the principal in the business of the agency, has named another person accordingly, such person is not a sub-agent, but an agent of the principal for such part of the business of the agency as is entrusted to him.

Illustrations

(a) A directs B, his solicitor, to sell his estate by auction , and to employ an auctioneer for the purpose. B names C, an auctioneer, to conduct the sale. C is not a sub-agent, but is A's agent for the conduct of the sale.

(b) A authorises B, a merchant in Calcutta, to recover the moneys due to A from C & Co. B instructs D, a solicitor, to take legal proceedings against C & Co. for the recovery of the money. D is not a sub-agent, but is a solicitor for A.”

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