Explain the express and implied authority. What do you understand by the expression, 'agency by estoppel’?
Ans. Express and implied authority— The authority given by the principal to his agent may be either express or implied. When the authority is given in spoken or written words,it is an express authority. It is implied when it is left to be inferred from the circumstances of the case or the course of dealing between the parties. In mercantile transactions the authority of an agent is generally regulated by the usage of the particular business in which the agent is employed. An agent who has authority to receive supply of goods for his principal has implied authority to sign an acknowledgment of balance due. (Sec. 187).
Illustration
A owns a shop in Serampur, himself living in Calcutta, and visiting the shop occasionally. The shop is managed by B, and he is in the habit of ordering goods from C in the name of A for the purpose Of the shop, and of paying for them out Of A's fund With A's knowledge. B has an implied authority from A to order goods from C in the name of A for the purpose of the Shop.
Agency by estoppel.—This arises when one person puts another in such a position as lead other persons to think that they are entitled to treat the second persons as authorised to act as agent for the first in respect of certain class of business. In such a case the first person is estopped from denying to those who have acted on the belief which he has by his conduct thus induced that the second was in fact his agent. This is illustrated by the relation of factors to their principal. If a principal entrusts goods to a factor and does not authorise him to sell, the principal is estopped from denying that the factor has authority if the factor sells to someone who buys bona fide without notice of the limitation of the factor's authority.
If a master allows his servant to purchase goods for him from B habitually upon credit, B becomes entitled to look to the master for the payment for such things as are supplied in the ordinary course of dealing.
Similarly, a manager of a hotel can bind his employer by purchase on credit of articles required for use in the hotel, and even if such authority is revoked, third persons dealing with the manager in ignorance of the revocation are not to be prejudiced.
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