Section 144
Section 144
A “sub-agent” is a person employed by, and acting under the control of, the original agent in the business of the agency.
Representation of principal by sub-agent properly appointed; agent’s responsibility for sub-agent; sub-agent’s responsibility 145.
(1)
Where a sub-agent is properly appointed, the principal is, so far as regards third persons, represented by the sub-agent, and is bound by and responsible for his acts as if he were an agent originally appointed by the principal.
(2)
The agent is responsible to the principal for the acts of the sub-agent.
(3)
The sub-agent is responsible for his acts to the agent, but not to the principal, except in case of fraud or wilful wrong.
Agent’s responsibility for sub-agent appointed without authority 146.
Where an agent, without having authority to do so, has appointed a person to act as a sub-agent, the agent stands towards such person in the relation of a principal to an agent, and is responsible for his acts both to the principal and to third persons; the principal is not represented by or responsible for the acts of the person so employed, nor is that person responsible to the principal.
Contracts
B.L.R.O. 3/2023 73
Relation between principal and person duly appointed by agent to act in business of agency 147.
Where 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 Taiping, 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 solicitor for A.
Agent’s duty in naming such person 148.
In selecting such agent for his principal, an agent is bound to exercise the same amount of discretion as a man of ordinary prudence would exercise in his own case; and, if he does this, he is not responsible to the principal for the acts or negligence of the agent so selected.
Illustrations
(a)
A instructs B, a merchant, to buy a ship for him. B employs a ship surveyor of good reputation to choose a ship for A. The surveyor makes the choice negligently and the ship turns out to be unseaworthy and is lost. B is not, but the surveyor is, responsible to A.
(b)
A consigns goods to B, a merchant, for sale. B, in due course, employs an auctioneer in good credit to sell the goods of A and allows the auctioneer to receive the proceeds of the sale. The auctioneer afterwards becomes insolvent without having accounted for the proceeds. B is not responsible to A for the proceeds.
Ratification
Right of person as to acts done for him without his authority. Effect of ratification 149.
Where acts are done by one person on behalf of another but without his knowledge or authority, he may elect to ratify or to disown such acts. If
Contracts 74
he ratify them, the same effects will follow as if they had been performed by his authority.
Ratification may be expressed or implied 150.
Ratification may be expressed or may be implied in the conduct of the person on whose behalf the acts are done.
Illustrations
(a)
A, without authority, buys goods for B. Afterwards B sells them to C on his own account; B’s conduct implies a ratification of the purchase made for him by A.
(b)
A, without B’s authority, lends B’s money to C. Afterwards B accepts interest on the money from C. B’s conduct implies a ratification of the loan.
Knowledge requisite to valid ratification 151.
No valid ratification can be made by a person whose knowledge of the facts of the case is materially defective.
Effect of ratifying unauthorised act forming part of transaction 152.
A person ratifying any unauthorised act done on his behalf ratifies the whole of the transaction of which such act formed a part.
Ratification of unauthorised act cannot injure third person 153.