What are the important Rights of an Agent?


1. Right of retainer (Sec. 217):

An agent has a right of retainer out of the sums received on principal’s account. He can retain all moneys due to himself in respect of advances made or expenses properly incurred by him in conducting such business, and also such remuneration as may be payable to him for acting as agent.

2. Right to receive remuneration:


Unless there is a contract to the contrary, the agent has a right to receive agreed remuneration or in the absence of an agreement, a reasonable remuneration, after he has completed the work. In the absence of any special contract, payment for the performance of any act is not due to the agent until the completion of such act (Sec. 219).

3. Right of lien (Sec. 221):

An agent has a right of lien to retain goods, papers and other property, both movable and immovable, of the principal, received by him, until money due to himself for commission, disbursement and services rendered in respect of the same, has been paid or accounted for.

The above right is subject to a contract to the contrary. Again, this right of the agent is possessor right. If the possession is lost, the right is also lost.


4. Right of indemnity (Sec. 222):

The employer of an agent is bound to indemnify him against the consequences of all lawful acts done by such agent in exercise of the authority conferred upon him.


A appoints B as an agent to sell goods. B sells certain goods to C. But principal A does not send any goods to B for delivering them to C. C sues B for breach of contract. B informs of the suit and A authorized B to defend the suit. B defends the suit but loses and is compelled to pay damages and costs, and incur expenses. A is liable to B for the above loss.


It should be noted that this right to indemnification extends to acts done in good faith even if such acts cause injury to the right of third person.

5. Right to compensation for injury caused due to negligence of the principal:

The principal must make compensation to his agent in respect of injury caused to such agent by the principal’s neglect or want of skill.



A employs B as a bricklayer in building a house. He himself puts up a scaffolding for the purpose. The scaffolding is unskillfully put up, and B is in consequence hurt. A must make compensation to B.

6. Right of stoppage in transit:

This right is available under the Sale of Goods Act, An agent can exercise this right in two cases:

1. Where the agent has incurred personal liability by purchasing goods for the principal, he has a right to stop the goods in transit, if the goods have been delivered to a carrier.


2. Where the agent has sold the goods to a buyer and the agent is personally liable for the price of the goods, e.g., a Del credere agent, he can exercise the right of stoppage in transit as if he were the unpaid seller.

7. Right to appoint sub-agent or substituted agent in certain cases:

Where the agent has express or implied authority to appoint a sub-agent or substituted agent, he can appoint another person to act for the principal.

8. Right to compensation for premature revocation of agency (Sec. 205):

In case there is an express or implied contract, that agency should be continued for any fixed period of time, the principal is liable to pay compensation to the agent for a premature revocation.

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