An agent is a person employed to do any act for another or to represent another in dealings with third persons. The person for whom such is done, or who is represented, is called the principal‖.
The contract which creates the relationship of ‗principal‘ and ‗agency‘ is called an ‗agency‘ thus where A appoints B to buy ten bugs of sugar on his behalf, A is the ‗principal and B is the ‗agency‘ and the contract between the two is the ‗agency if, pursuance of the contract of agency, the ‗agent‘ purchase the bags of sugar from C, a wholesale dealer are brought into direct contractual relations.
Under a contract of agency the agent is authorized to establish privity of contract between the principal ( his employer ) and a third party. As such as the function of a third parties. In a way, Therefore an agent is merely a connecting link. After entering into a contract on behalf of the principal with third party, the agent drops out and ceases to be a party to the contract and the contract bind the principal and the third party as if they have made it themselves
Characteristics of agency
1. The agent performs a service for the principal
2. The agent represents the principal
3. Acts of the agent affects the legal position of the principal the agency relationship differs from trusts and bailment.