Difference between Sub agent and substitute agent

Home Forums Sub-Agents and Substituted Agents under Contract Act Difference between Sub agent and substitute agent

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    • #2423
      Intern
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      A sub-agent is the agent of the original agent because he works under the control of the agent
      whereas, a substituted agent is the principal’s agent as he works under the control of the
      principal. A sub-agent is responsible to the original agent for all the acts and the acts of fraud or
      willful wrong to the principal. A substituted agent is responsible solely to the principal. No
      direct contract is there between the principal and the sub-agent whereas there is a direct
      contract between the principal and the substituted agent.
      An agent appoints a sub-agent only when he deems it important as per the nature of agency or
      the custom of trade. Whereas, a substituted agent is appointed by the agent when he has

      implied or express authority to do so from the principal. Sub-agent is liable to the agent. O the
      other hand, the substituted agent is liable to the principal. 
      The agent pays commission or remuneration to a sub-agent. In the case of a substituted agent,
      the principal makes the payments.
      A principal is not responsible to the third parties for the acts committed by the sub-agent
      provided he has not been appointed by the principal’s consent. The principal is bound to all the
      acts of a substituted agent in the same way and extent as he is liable to the acts of his agent.

    • #2583
      Intern
      Participant

      SUB AGENT:
      Section 191 of Indian contract Act, A “sub-agent” is a person employed by and acting under the control of the original agent in the business of the agency.

      CONTROL:
      Sub-agents work under the control of an agent

      CONTRACTUAL RELATIONSHIP:
      There is no contract between the sub-agent and the principal.

      LIABILITY:
      The sub-agent is cannot be held liable by the principal, except in case of fraud. Also, the principal and the sub-agent cannot sue each other directly

      RESPONSIBILITYAND REMUNERATION:
      The agent is responsible for the acts of the sub-agent and he can delegate his work to his sub-agent. But, the sub-agent is not entitled to get any remuneration from the principal.

      SUBSTITUTED AGENT:
      The substituted agent is a person named by the agent for the principal. He is an agent for a part of the agency entrusted to him. Here the agent must hold an implied or express authority from the principal to name another person act as an agency business source. So such person is an agent of principal for the part of the work entrusted to him.

      CONTROL:
      The substituted agent works under the control of the principal.

      CONTRACTUAL RELATIONSHIP:
      There exists a contractual relationship between the substituted agent and the principal.

      LIABILITY:
      A substituted agent can be held liable by his principle. Also, the principal and the substituted agent can sue each other.

      RESPONSIBILITY AND REMUNERATION:
      The agent is not responsible for the acts of the substituted agent and he cannot delegate his work to his substituted agent but, the substituted agent can get remuneration from his principal.

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