A was the Manager of a hotel where his wife B also worked as Dy. Manager. They were living together in the same hotel but did not have any separate establishments.......Decide giving reasons.

Question: A was the Manager of a hotel where his wife B also worked as Dy. Manager. They were living together in the same hotel but did not have any separate establishments of their own. B purchased some clothes from Z on credit. Z demanded payment from A. Is A liable to pay? Decide giving reasons. [JJS 2015]

Find the answer to the mains question of the Law of Contract only on Legal Bites. [A was the Manager of a hotel where his wife B also worked as Dy. Manager. They were living together in the same hotel but did not have any separate establishments of their own. B purchased some clothes from Z on credit. Z demanded payment from A. Is A liable to pay? Decide giving reasons.]

Answer

An agent is a person employed to do any act for another or to represent another in dealings with a third person. The person for whom such an act is done, or who is so represented, is called the principal.

Sections 182 to 238 of Indian Contract Act, 1872 deals with the concept of agency.

Ways of formation of agency contract:-

1. Expressed Authority: The formation of agency can be done in an expressed manner i.e., oral or written mode.

Any eligible person could make the appointment of an agent to perform duties on their behalf by contract.

2. Implied Authority: An agent can also be appointed indirectly by the principal. The indirect manner can include particular circumstances that lead to the formation of an agency.

Agency between Husband and Wife

Generally, there exists no agency between a husband and wife, except in cases where it has expressly or impliedly been sanctioned that either of them would do certain acts or transactions as the agent of the other.

That is, a relationship of agency can come into existence between the two through contract, appointment, or ratification. A husband is responsible for necessaries to his wife when they are living apart due to the husband’s fault. This results in an agency of necessity where the wife can use her husband’s credit for what is necessary for her to live. But in cases where they are separated because of the wife’s whims or faults, for no just reason, the husband is not liable for the wife’s necessaries.

In the facts of the case given in hand, since A and B are living together in the hotel, A may or may not have a duty to support B. But if B’s clothes had been purchased fall under essential needs that her husband is expected to take care of, A would be liable in such case to cover B’s debt to Z. However, if the clothes are considered non-essential or luxury items, they would not fall under the category of necessaries, and A might not be liable unless he explicitly or implicitly authorized the purchase through conduct or agreement.

Thus, the liability of A to cover B’s debt to Z depends on a) whether B had the authority to act on A's behalf and b) whether the clothes are classified as necessaries essential for B's living. If either of the conditions is satisfied, A would be responsible for the debt to Z.