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CMA Foundation · Fundamentals of Business Laws and Business Communication · Meaning of Indemnity, Guarantee, Pledge, Agent

Neha is a merchant in Calcutta authorised by Arjun to recover money due to Arjun from M/s Dutta & Co. Neha instructs Gopal, a solicitor, to take legal proceedings against Dutta & Co. for the recovery. Under the Indian Contract Act, 1872, Gopal is:

Gopal is solicitor for Arjun, not a sub-agent of Neha. Where an agent with authority to name another person for the business does so, the person named acts as the principal's own agent for the part of the business entrusted to him.

  1. AA sub-agent of Neha
  2. BNeha's employee, with no relation to Arjun
  3. CSolicitor for ArjunCorrect
  4. DAn agent of Dutta & Co.

Explanation

Neha, holding implied authority to name another person for the business, named Gopal; such a person is not a sub-agent but the principal's agent for that part of the business (Section 194, illustration (b)). Gopal is therefore Arjun's solicitor. The sub-agent option wrongly treats him as Neha's delegate.

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