COMPETZ - Makes You Compete
LEGAL AND REGULATORY ASPECTS OF BANKING (LRAB)
Unit - 45: Contact of Agency
Legal & Regulatory Aspects of Banking -
Unit - 44 : Contract of Agency
Contract means an agreement enforceable by law. There must be lawful proposal by one party and the other party must accept the proposal to enter into a contract.
Agent is a person employed to do any act for another person or to represent another person in dealing with some other person .
Unlike Other Contracts , no consideration is essential for a contract of agency .
It is agent's duty to perform as per the principal's lawful direction and get paid for services and be indemnified against consequences .
When ancillary services rendered by the bank such as remittance , collection of cheques , bills etc. on behalf of customers, it is acting as an agent to its customer.
RBI's Obligation , on behalf of Central government, to undertake management of government debt , banker to the government , etc. is also an example of agency arrangement.
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