LAW ON BUSINESS ORGANIZATION

1. What is doctrine of agency by necessity?

Agency by necessity is an agency created by an emergency arising from a situation
making it necessary or proper for the agent to act without receiving the sanction or
authorization of the principal, in order to prevent harm to the principal. It arises when a
duty is imposed on a person to act on behalf of another apart from contract and to prevent
irreparable injury. Such an agency relationship is recognized by the courts.

2. What is sub-agent?
According to section 191 a sub-agent “is a person employed by and acting under the
control of, the original agent in the business of agency. He is the agent of the original
agent”.

The sub-agent may have two positions:

1) Sub-agent’s Position When he / she is Properly Appointed (Section 192)

As the principal has permitted the appointment of a sub-agent therefore he /she is

bound by the acts of the sub-agent and is responsible to the third party.

The agent is responsible to the principal for the acts of the sub-agent.

The sub-agent is responsible for his/her acts to the agent, but not to the principal,
except in case of fraud or willful wrong.

2) Sub-agent’s Position When he/she is not Properly Appointed (Section 193)

As the sub-agent is appointed without the consent of the principal the principal is
not responsible for the acts of the sub-agent to the third parties.

The agent is responsible for the acts of the sub-agent to the principal as well as to
the third parties.

The sub-agent is responsible for his/her acts to the agent and not to the principal.

3. What is joint agent?

One or two or more agents jointly instructed by a principal to act on his behalf. In the case
of estate agents this is normally on the basis that if any one of the agents effect the sale,
letting or other joint agent(s) will share the remuneration in agreed proportions. None of
these agents would be entitled to a commission if the transaction is concluded as a result
of someone else's introduction.

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If you appoint two estate agents to act together for you in selling the property, this is known
as ‘joint agency’ or ‘joint sole agency’. A joint sole agency contract is where the estate
agents involved share the commission when the property is sold. In practice, the agent that
actually finds the buyer usually gets a higher split of the commission but this percentage
share would need to be agreed at the start of the contract between owner and both agents.

Joint agency is often a useful way to get out of a sole agency before the end of the contract
– if you tell your estate agent that you’re not happy and are considering terminating their
contract at the earliest opportunity, then give them the option of being retained on a joint
agency basis, they might be smart enough to see the merits of a slice of a fee rather than
none at all. This type of agency is also useful when you want to use two agents that offer
different services (for example a town agent and a country agent if you live on the border
of a town). Do bear in mind the majority of the public have a negative perception about
properties on with more than one agent (“I’ve seen that before – there must be something
wrong with it”). If you’re thinking about joint agency, try to choose two agents that can
communicate/work together happily.

4. What is apparent authority?

Apparent authority is the power of an agent to act on behalf of a principal, even though
not expressly or impliedly granted. This power arises only if a third party reasonably
infers, from the principal's conduct, that the principal granted such power to the
agent. The idea of apparent authority protects third parties who would otherwise incur
losses if the agent's signature did not bind the principal after reasonable observers thought
that it would. Typically, if an agent has apparent authority, the agent's principal will be
held liable for the actions of the agent which are within the scope of the apparent
authority.
"The doctrine protects innocent third persons who have reasonably relied to their
detriment upon the representations of those whom the principal holds out as possessing
authority to act for him."
5. What is estoppel by principal?
Legally binding agency relationship that may arise where, in fact, no formal agency
agreement is in effect. A principal may give an appearance of agency relationship by, for
example, furnishing his or her firm's call cards or other stationery to the agent. In such
cases, the existence of an agency may be presumed, and the principal may be bound by
the acts of the agent performed on the principal's behalf. Also called presumption of
agency. See also partnership by estoppel.

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6. What is joint principal?

If there are several participants in a crime it follows that they all may well be taking
different roles. The principal offender is the person considered responsible for carrying
out the act and therefore the one most immediately linked with the crime. Other,
secondary offender/s, may have participated by encouraging the act or handing the
perpetrator the weapon but there will remain one crime. The normal rules of causation
apply and the principal offender is the person whose act is the cause of the act and he is
the perpetrator of the offence. They are the direct cause of the act. As is consistent with
the law regarding criminal liability the principal must, in addition, have the requisite
means for the offence in question.
In many cases the establishment of who is responsible as the main perpetrator and
therefore the principal offender will be a straight forward process, but in some cases there
may be more than one principal. This is an important point because appropriate charges
need to be laid against all the principal offenders in order that all the perpetrators can be
brought before the criminal courts. In the case of certain specific offences, it is necessary,
by virtue of the very nature and definition of the offence, that there are two or more
principals for the offence to be committed in any event. Riot and affray are such offences.
It is not enough that someone is 'involved' in some way and it must be shown that they
contributed to the act in order that they can be properly considered to be a joint principal.
Co-principals or joint principals arise where more than one person is responsible
for the act and they have the necessary means.

7. Requisites for solidary liability

 Each debtor is liable only for a proportionate part of the entire debt;
 Each creditor, if there several, is entitled to a proportionate part of the credit.

 The demand made by one creditor upon one debtor, produces the effects of default
only as between them, but not with respect to the others.

 The interruption of prescription caused by the demand by one creditor upon one
debtor, will not benefit the co-creditors; neither, will that demand interrupt the
prescription of the obligation as to the other debtor.

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 The insolvency of a debtor will not increase the liability of his co-debtors. Neither,
will it allow a creditor to demand anything from the co-creditors.

 The vices of each obligation emanating from the personal defect of a particular
debtor or creditor will not affect the obligation or rights of the others.

8. Solidary Liability meaning

A joint and solidary obligation or solidary obligation is one wherein either one of
several creditors has the right to demand full and complete compliance of an obligation
against either one of the debtors. In such an obligation, the debtors are sureties who are
liable for the full amount of the debt incurred by the principal debtor. A surety is liable
regardless of whether it benefitted from the debt incurred by the principal debtor