<P> In India, section 182 of the Contract Act 1872 defines Agent as "a person employed to do any act for another or to represent another in dealings with third persons". </P> <P> The reciprocal rights and liabilities between a principal and an agent reflect commercial and legal realities . A business owner often relies on an employee or another person to conduct a business . In the case of a corporation, since a corporation can only act through Natural person agents . The principal is bound by the contract entered into by the agent, so long as the agent performs within the scope of the agency . </P> <P> A third party may rely in good faith on the representation by a person who identifies himself as an agent for another . It is not always cost effective to check whether someone who is represented as having the authority to act for another actually has such authority . If it is subsequently found that the alleged agent was acting without necessary authority, the agent will generally be held liable . </P> <P> There are three broad classes of agent: </P>

Who has authority to act on behalf of a company