Meaning of Delegation of Authority
Delegation of authority means the transfer of decision-making power or responsibility from one person to another, usually from a higher authority to a subordinate. In the legal sense, it refers to situations where an agent appointed by a principal transfers their authority to another person. The general rule under Section 190 of the Indian Contract Act, 1872 is that an agent cannot lawfully delegate their authority unless the principal permits it. This principle is captured by the Latin maxim “Delegatus non potest delegare”, meaning a delegate cannot further delegate.
Legal Provisions and Exceptions
Although delegation is generally prohibited, there are certain exceptions recognized under the law. According to Sections 190–193 of the Indian Contract Act, 1872, an agent may delegate authority if: (1) it is expressly allowed by the principal, (2) it is implied by the conduct or customs of trade, (3) it is necessary for the proper performance of duties, or (4) it is a ministerial act not requiring discretion. In such cases, the acts of the sub-agent properly appointed are binding on the principal, and the principal is responsible for their conduct.
Rights and Liabilities in Delegation
When delegation is proper and valid, the sub-agent becomes an agent of the principal for the acts authorized. However, if the delegation is unauthorized, the principal is not bound by the sub-agent’s actions, and the original agent remains personally liable. This balance ensures that while principals are protected against unauthorized delegations, they can also benefit from practical flexibility where delegation is necessary. Thus, the law provides both safeguards and exceptions to maintain efficiency in commercial and contractual dealings.
Real-Life Example
For example, A appoints B as his agent to manage his business. Without A’s permission, B appoints C to act on his behalf. If C enters into a contract, A is not bound by it because B was not authorized to delegate. However, if B was a manager of a large firm where delegation is a normal trade custom, or if A had expressly permitted delegation, then C’s acts would bind A. This example highlights the difference between valid and invalid delegation of authority.
Mnemonic to Remember – “PINC Rule”
To recall the exceptions to delegation, use PINC:
- P = Permission of the principal.
- I = Implied authority by conduct/custom.
- N = Necessity for proper performance.
- C = Custom of trade.
Think of it as: “Delegation needs a PINC to unlock authority.” This makes remembering the exceptions quick and easy.
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