Law: Contract Act, 1872

Section: 202

(a) Admission--- ----Determination of the nature of relationship between the parties under agreement---Plaintiff's admission in plaint that he was appointed as an agent of defendant through agreement---Defendant alleging plaintiff to be licencee under agreement---Validity---Such admission would hardly be determinative of relationship between parties---Duty of court would be to examine agreement and determine its true legal nature. (b) Contract Act (IX of 1872)--- ----S. 202---Agent having an interest in property of agency---Agreement expressly conferring a right on either party to terminate such agency---Validity---Such right would not be limited to one party, rather same would apply equally to both the parties. Roomi Enterprises (Pvt.) Ltd. v. Stafford Miller Ltd. 2005 CLD 1805 rel. (c) Contract Act (IX of 1872)--- ----S. 202---Provision of S.202 of Contract Act, 1872, applicability of---Essential conditions to be fulfilled stated. For section 202 of the Contract Act, 1872 to apply, the following three conditions must be fulfilled; (a) there must be an agency; (b) the subject matter of the agency must be some property; and (c) the agent must himself have an interest in such property. Thus, for section 202 to apply, the court must ask itself the following sequential questions: (a) is the contract in the nature of agency? If so, (b) does the agent himself have an interest in such property? A negative answer to any one of these questions would negative the application of section 202. For proper understanding of section 202, it is crucial to keep in mind the word "himself", as used therein. The section requires that the agent must "himself" have "an interest in the property" which forms the subject of the agency. In other words, the "interest" of the agent with which the section is concerned must be an interest that he has in his own right or capacity, i.e., a capacity other than that of simply being the agent. The point is reinforced by the concluding words of the section: if the agent "himself" has such an interest, then the agency cannot (in absence of an express provision) be terminated to the prejudice of "such" interest. The word "such" obviously relates…

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