The concept of authority Essay
The concept of authority, 499 words essay example
In an agency Law, authority means the power or right that an agent has to make the decisions or to make contracts with the third parties on the principal's behalf. Authority is a factual situation, but the power is a lawful concept. The authority is also the acts which have been agreed by the principal and the agent that the latter can do anything so that it can bind the principal.
This means that if they are done within the authority, then the acts are binding on the principal. An agent's authority may be two types of authority. Actual authority is the authority that has been given by the principal for using oral or writing. It can be implied from the express authority, from the circumstances of the case and the conduct of parties. Actual authority is sometimes referred together by the other two that is express authority and implied authority. As in the case of The Firm of T.A.R. CT. v The Firm of S.V.K.R, the Privy Council decided that an agent that has the authority to part with the firm's money, the authority is necessary to receive the repayment for the firm.
In Section 140 of the Contracts Act 1950, express authority is the authority that using witting or speaking the words. The express authority will depend on the creation of the words used on the appointment. The document will need to be checked if the appointment is using the hand-writing. If it is in speaking the words, the matter of evidence will incur in the scope of the authority. Authority can be implied from the circumstances of the case or the nature of the activities for the agent if there is no express authority as the implied authority is stated in Section 140 of the Contracts Act 1950.
Besides that, an apparent authority is the authority that has not been given by the principal but which the law considers the agent as its own even though the principal has not agreed. The apparent authority may be greater than the actual authority if the principal is bound by the agent's action. So, the apparent authority is the authority that which the principal represents to third parties that has been given to the agent.
In Section 135 of the Contract Acts 1950, the definition of the agent is 'a person who employed to do any act for another or to represent the another things with the third party'. The agent is described as the person that is taking the action by the principal or the principal is represented by the agent. The third party or third person is the person that involves with whom the agent brings the principal into the legal relationship. In an agency, there are in effect of two contracts, that is made between the principal and the agent from which the agent derives his authority to take action and on principal's behalf and between the principal and the third person through the work of agent.