Law: Contract Act (IX of 1872)

Section: 188

Contract Act (IX of 1872)--- ----S.  188---Principal  and  agent---Authority  of agent---Extent---Persons employed by another person to transact business on his behalf with third person. would be deemed to be agent  Person employing such agent would be known as principal while donee of authority would be agent---Agent was, thus, intermediary, who was authorised by principal to deal with third person and acts done by him were binding upon principal---Agency would create jural relationship between principal and third person---Nature of such authority was personal, non-transferable and essentially revocable---Such authority, however, would be subject to certain terms created by contract and recognized by law--Where agent had interest in subject-matter of contract such agency would be permanent and not revocable---Interest in subject-matter, must, however, be anterior to agency and it must not arise subsequently or incidentally---Where agency was created with adequate consideration and was designed to serve as security for some interest of agent, such agency was irrevocable. Law of Contracts by Chitty and Smart v. Sanders (1848) 5 CB 895 rel Muhammad Arif Afandi v. Egypt Air 1980 SCMR 588; West Pakistan Industrict Corporation, Karachi v. Aziz Qureshi 1973  SCMR  555;  Pakistan Automobile  Corporation  v.   General Motors Overseas Distribution Corporation PLD 1982 Kar. 796; Huma Enterprises and others v. S. Pir Ali Shah 1985 CLC 1522; Messrs World Wide Trading Co. v. Sanyo Electric Trading Co. PLD 1986 Kar. 234 and Law of Agency by G. Ramachandran, p. 1 ref. Contract Act (IX of 1872)--- ----5.182---Civil Procedure Code (V of 1908), O.XXXIX, Rr.l & 2---Contract of agency between plaintiff and defendant---Contract between parties was admittedly contract of agency which contained specific clause wherein both parties covenanted that plaintiff as well as defendant would have right to terminate the same by serving three months' notice---Agency created by such contract was, thus, revocable and defendant had full authority to terminate the same---Perusal of notice served by defendant upon plaintiff clearly…