Question 5 (b)

Short notes: sub-agents and substituted agents; the partners an LLP may have

6 marks

Time to write: About 12 minutes
Topic: Short notes and true or false across several topics
Notes: Crux notes

Question

Question 5 (b) · 6 marks

Write a brief note on:

Sub agent and substituted agent
Who may be a partner in an LLP?

Reworded from the university paper; the task is the same. The original paper belongs to the University of Delhi. See DU's question bank.

Before you write

Read off the question and its marks

12 minfor 6 marks

Read from the question

Write…Who…?2 asks, each with its own marks below. Answer both.
note onA note opens with the meaning, then two or three key points. No long introduction.

What the paper leaves open

Only a combined mark of 18 is printed for parts (a) to (c); each part is reckoned here at 6 marks (inferred).

Write it in this order

The parts stand alone: start with the one you are surest of.

Read; underline the asks; jot your points 1 min
1 (i) Sub-agent and substituted agent, and how they differ 3 marks 5 min
2 (ii) Who may become an LLP's partner 3 marks 5 min
Check: every ask answered, key terms underlined 1 min

Short on time? A few lines on every part beat a full answer to one: each part is capped at its own marks.

Try it first. About 12 minutes for 6 marks. Write it out, then open the solution.

Solution

Hover or tap a marked figure, like 72,000, to see how it is made and where else it appears.

(i) Sub-agents and substituted agents.

Sub-agent (s. 191): “a person employed by, and acting under the control of, the original agent in the business of the agency”. Work the agent has agreed to do himself may not be handed to another unless the ordinary custom of trade permits a sub-agent, or the nature of the agency makes one necessary (s. 190): the nature of the agency must require a sub-agent, not merely permit one. Appointment is also valid where the original terms of appointment contemplated it, or in an unforeseen emergency.
Substituted agent (s. 194): a person appointed by the agent, with the express or implied authority of the principal, to act for the principal in the business of the agency. He “is not a sub-agent but an agent of the principal for” the part of the business entrusted to him: where A directs his solicitor B to sell his estate by auction and to employ an auctioneer, the auctioneer C whom B names is A's agent for the sale.
Sub-agent properly appointed (s. 192): towards third persons the principal is bound by the sub-agent's acts as if he had appointed him himself; the agent answers to the principal for the sub-agent; and the sub-agent answers to the agent, not to the principal, except for fraud or wilful wrong.
Sub-agent appointed without authority (s. 193): the agent alone answers for that person's acts, to the principal and to third persons alike; the principal is not bound by those acts, and the person owes the principal nothing: he answers only to the agent.
Difference. A sub-agent works under the agent and reaches the principal only through the agent's appointment; a substituted agent is directly the principal's agent for the part of the business given to him.

(ii) Who may become an LLP's partner (s. 5). Any individual or body corporate may be a partner in an LLP. But no individual can become a partner while a competent court's finding that he is of unsound mind remains in force, while he is an undischarged insolvent, or while his application to be adjudicated an insolvent is pending. An LLP must have at least two partners (s. 6); if it carries on business for more than six months with only one partner, that partner is personally liable for the LLP's obligations incurred during that time.

Where the 6 marks sit

#	Component	Marks
1	(i) Sub-agent and substituted agent, and how they differ	3
2	(ii) Who may become an LLP's partner	3
	Total	6

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