Difference between sub- agent and substituted agent and difference in the scope.

Home Forums Sub-Agents and Substituted Agents under Contract Act Difference between sub- agent and substituted agent and difference in the scope.

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    • #458
      Priya Singh

      A sub-agent has been defined by Section 191 of the 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)’.
      A substituted agent is defined by Section 194 thus, “Where an agent, holding an express or implied authority to name another person or act for the principal in the business of agency, has named another person accordingly, such person is not a sub- agent but an agent , but an agent of the principal for such part of the business of the agency as is entrusted to him.”
      Coming towards the difference part:
      A sub agent is responsible for all the acts of the original agent along with the fraud taken place or any willful wrong took place to the goods. On the other hand, substituted is only responsible to the principle alone.
      There is no direct contract between the sub- agent and the Principle whereas, there is direct contract between the substituted agent and the principle.
      The agent pays the remuneration or the commission to a sub-agent. But in the case of the substituted agent the principle directly makes the payment.
      The scope of the duty depends on the Agent and in the case of these two different agents yes definitely they both have different roles to present in case of sub agent he is responsible to his agent for any misleading in the contract whereas in the case of substituted agent he is directly responsible to the principle. A sub agent will not be sued for any fraud and will not pay to the principle.

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