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  • Read the given passage very carefully and answer the question. An agency arrangement is a form of general contract. As such, except where the a

Read the given passage very carefully and answer the question.

An agency arrangement is a form of general contract. As such, except where the agency is irrevocable, an agency can terminate in the same way as a contract is discharged. Only the act or consent of the parties to the agency or the enforcement of the law may terminate the relationship between the principal and the agent. “In the absence of anything to prove its termination, an agency, when proven to have existed, will be presumed to have continued, unless such a length of time has elapsed as destroys the presumption.” When an entity is dissolved, the obligation of the agent to work on behalf of the principal comes to an end. A government law or instrument may stipulate the timeline for the termination of an entity.

In such a case, if the instrument states in clear and unambiguous terms that after the expiry of the time stated in the instrument, an agency shall terminate without intervention on the part of the principal or administrator, the agency shall, in effect, terminate. If the parties maintain their partnership as principal and agent after the expiry of the duration given in the contract, a substantiated assumption is posed that their relationship is regulated by the original contract and that the contract is extended for a similar term. For example, where the parties entered into a contract for a year and proceeded to behave after one year under the contractual conditions, the court would conclude that the parties genuinely wanted to hold the contract alive for a period of time.

On the other hand, if no reasonable deadline has been set by the parties for the expiration of the contract, the contract is assumed to have been terminated after a reasonable period of time. “The nature of the act specifically authorised, the formality of the authorisation, the likelihood of changes in the purposes of the principal, and other factors shall determine what constitutes a reasonable period of time during which the authority continues.” In comparison, the burden of proving an agency’s termination or revocation lies with the agency.

Question

Waman hired Chaman as his agent. Waman owed Chaman a sum of Rs.10,000 and gave him an agreed exchange bill with the authority to fill in the name of the drawer. Before the Chaman could avail the opportunity given, Waman died. Now, can Chaman still discharge the liability of Waman against himself?

 

Option: 1

  Yes, Chaman has the power to obtain his 10,000 rupees

 


Option: 2

Yes, Chaman stepped into the shoes of Waman and can use his property according to his own will

 


Option: 3

No, Chaman cannot use the bill for discharging his liability he has to restore to other remedies

 


Option: 4

Chaman can use the bill given by the deceased for discharging his liability to pay off his debt

 


Answers (1)

best_answer

In the case of Carter v. White, (1883), a case with similar facts whereby the court held that the Agent’s power to fill in the name of the drawer was not considered to be terminated upon the death of the principal if the principal empowered the agent.

 

Posted by

avinash.dongre

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