Difference & Scope of a ‘Sub-Agent’ and a ‘Substituted Agent’

Home Forums Sub-Agents and Substituted Agents under Contract Act Difference & Scope of a ‘Sub-Agent’ and a ‘Substituted Agent’

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    • #1181
      Ayush Patria

      A sub-agent is an agent of the original agent while the Substituted Agent is the agent of the Principal.
      Following are the basis of the difference between the Sub-Agent & Substituted Agent –
      • Section
      Sub-Agent – Sub-Agent is stated under Section 191 of the Indian Contract Act, 1872.
      Substituted Agent – Substituted Agent is stated under Section 194 of the Indian Contract Act, 1872.
      • Meaning
      Sub-Agent – A sub-agent is a person employed by and acting under the control of the original agent in the business of the agency.
      Substituted Agent – A substituted agent is a person who is appointed by the agent but works under the authority of the Principal.
      • Responsible for
      Sub-Agent – A sub-agent is responsible for the agent.
      Substituted Agent – A substituted agent is responsible to the principal.
      • Appointed by
      Sub-Agent – A sub-agent is appointed by the original agent.
      Substituted Agent – A substituted agent is appointed by the original agent on behalf of the Principal.
      • Acts under
      Sub-Agent – A sub-agent acts under the authority & control of the original agent.
      Substituted Agent – A substituted agent acts under the control & authority of the Principal.
      • Liability
      Sub-Agent – The principal cannot hold the sub-agent liable, except in case of fraud.
      Substituted Agent – The principal can hold the substitute agent liable.
      • Contractual Relation
      Sub-Agent – There is no privity of contract between sub-agent and principal.
      Substituted Agent – There is a contractual relationship between the substituted agent & the Principal.
      • Responsibility towards the third party
      Sub-Agent – Principal cannot be held responsible towards the third party for the acts of the sub-agent as the sub-agent works under the authority of the original agent.
      Substituted Agent – The Principal is held responsible towards the third party for the acts of the substituted agent as he was appointed on behalf of the Principal & also works under the authority of the Principal.

      Are these two different in the scope?
      Yes, Both the Sub-agent & substituted agent are different in the scope because Sub-Agent is the agent of the original agent, he works under the control of the agent & original agent is responsible to pay remuneration to him & the agent is liable for the acts of the sub-agent; while the Substituted agent is the agent of the Principal, he works under the authority of the Principal & Principal is responsible to pay remuneration to the substituted agent & Principal is liable for the acts of the substituted agent.

    • #2028
      Intern
      Participant

      As per the Sec 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.
      Whereas ‘Substitute agent’ has been defined in Sec 194 of Indian Contract Act as, Relation between principal and person duly appointed by agent to act in business of agency.
      When an agent, holding an express or implied authority to name another person to act for the principal in the business of the agency, has named another person accordingly, such person is not a sub-agent, but an agent of the principal for such part of the business of the agency as is entrusted to him.

      A sub agent acts under the agent as per his orders and as his subordinate, whereas a substitute agent acts on the place of the main agent instead of him, he is not abide to work under the main agent unlike the sub agent.
      They both have different scope,
      Sub agent has a narrower scope as well as authority and works under the agent as per the hierarchy
      whereas the substituted agent has a wider scope as well as authority and does not work under the main agent but on his place

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