Agency Service: Rights of an Agent, Lien and Indemnification, Personal Liabilities of an Agent and Qualities Required to be a Successful Agent (For CBSE, ICSE, IAS, NET, NRA 2022)

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Rights of an Agent

Rights of an Agent

Right to Receive Remuneration

The agent has the right to receive from the principal reasonable remuneration for the work done by him in accordance with the agreement. As soon as the agent finishes his work, he has the right to receive remuneration.

Right of Lien

If the principal does not clear the accounts of the agent, the latter has the right of lien on the goods of the principal, that is, the agent can retain the goods in his possession for realising his dues.

Right to Adjust His Dues

The agent can deduct advances given by him to the principal, the expenses incurred by him and the remuneration to be received from the sales proceeds of the goods.

Right of Indemnification

As the agent represents the principal, the agent has a right to be indemnified by the principal against all charges, expenses and liabilities properly incurred by him in the course of an agency. An agent has also the right to be indemnified against the consequences of all lawful acts done by him in exercise of the authority conferred upon him.

Right to Compensation

The agent has a right to be compensated for injuries sustained by him due to the principal՚s neglect or want of skill.

Right of stoppage of goods in transit

An agent has a right to stop the goods in transit to the principal, if

  • He has bought the goods with his own money or against personal liability, and
  • The principal has become insolvent.

Personal Liabilities of an Agent

You have already learnt that when an agent executes a contract with a third party on behalf of a principal, the agent acts merely as a connecting link between the principal and the third party and incurs no personal liability. But in certain circumstances, as narrated below, the agent will be held personally liable.

Personal Liabilities of an Agent

Qualities Required to be a Successful Agent

After learning about the duties, responsibilities, and rights of an agent, you should also have an idea about the qualities required in an agent to carry out the work properly. Since the agents have to work hard and, in most cases, they have to travel a lot, it is essential that they must possess sound health. Besides physical fitness, every agent must possess certain mental qualities, which are as follows.

Qualities Required to be a Successful Agent


The agent must be sincere and honest in his dealings. He/she should not indulge in any activity that may have an adverse effect on the agency work. The accounts must be prepared honestly as per the terms and conditions of the agency.


The agent must show great diligence in his/her activity. To be successful, the agent must put sincere and persistent effort. At any moment he/she is not impatient.


One of the reasons for engaging an agent for any specific activity is the expertise he/she possesses in that area. Hence, the agent should be tactful in dealing with others and ensure completion of the task successfully.


The agent must perform his/her activities with great degree of confidence. If an agent does his/her work sincerely, timely and correctly, he/she can face any challenge with confidence.


The agent must have clear understanding of his/her duties, rights and responsibilities while performing his/her job. The awareness about the products and services, current market situations and consumer behaviour ensures success in agency services.


The agent must have the ability to visualise the future market situation and take appropriate action well in advance.


The responsible behaviour of the agent contributes towards the success of the agency to a great extent. The agent must discharge his/her duty as per the instruction of the principal, take appropriate action in time, and communicate with the principal as and when required.


The agents may have to move from place to place and from region to region. They come across different people and society while discharging their duties. So, it is essential that they must have a sense of adoptability in different situation and environment.

Agency Services

  • Diversity and complexity of modern life has increased the need for specialists in every walk of life. These days individual has neither the time nor the ability to meet his requirements himself. He takes the assistance of those who specialise in their respective fields and manage the affairs better. These specialised persons are known as agents.
  • Right from the household savings and investment in the business at international level, the role of agents has acquired a great significance these days. In business sector there are several areas in which agency services can be provided. The various agency services can be broadly classified into two heads as follows.
    • Financial Agency Services like Savings and Investment Agency, Insurance Agency; and
    • Commercial Agency Services like Advertising Agency, Selling and Purchasing agency and Clearing and Forwarding Agency, Tour and Travel Agency etc.

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