Indian Contract Act,1872

Act No : 9

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Section : Agent's duty in naming such person

195. Agent's duty in naming such person.-In selecting such agentfor his principal, an agent is bound to exercise the same amount ofdiscretion as a man of ordinary prudence would exercise in his owncase; and, if he does this, he is not responsible to the principal forthe acts or negligence of the agent so selected. Illustrations (a)A instructs B, a merchant, to buy a ship for him. B employs ashipsurveyor of good reputation to choose a ship for A. The surveyormakes the choice negligently and the ship turns out to be unseaworthyand is lost. B is not, but the surveyor is, responsible to A. (b)A consigns goods to B, a merchant, for sale. B, in duecourse, employs an auctioneer in good credit to sell the goods of A,and allows the auctioneer to receive the proceeds of the sale. Theauctioneer afterwards becomes insolvent without having accounted forthe proceeds. B is not responsible to A for the proceeds. Ratification

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