Rama directs Shyam to sell laptops for him and agrees to give Shyam eleven percent (11%) commission on the sale price fixed by Rama for each laptop. As Government of India put restrictions on import of Laptops, Rama thought that the prices of laptops might go up in near future and he revokes Shyam's authority for any further sale. Shyam, before receiving the letter at his end sold 5 laptops at the price fixed by Rama. Shyam asked for 11% commission on the sale of 5 Laptops for ` 1 lakh each. Explain under the provisions of the Indian Contract Act, 1872: \n(1) Whether sale of laptops after revoking Shyam's authority is binding on Rama? \n(2) Whether Shyam will be able to recover his commission from Rama, if yes, what will be the amount of such commission? \nOR\nAjay appoints Vijay to sell his electronic goods lying in his godown. He also agrees to give 10% commission on the sale price to Vijay. Afterwards, Ajay revokes Vijay’s authority by sending the letter to Vijay. The letter was sent on 3rd March which was received by Vijay on 7th March. On 5th March, Vijay sold the goods worth `1,20,000. He claimed for commission from Ajay, but Ajay refused as he already revoked the agency before sale of goods. Referring the provisions of the Indian Contract Act, 1872, whether Ajay was liable to pay commission to Vijay?

When termination of agent’s authority takes effect as to agent, and as to third persons [Section 208 of the Indian Contract Act, 1872]: The termination of the authority of an agent does not, so far as regards the agent, take effect before it becomes known to him, or, so far as regards third persons, before it becomes known to them.\nIn the instant case,\n(1) The revocation of Shyam's authority becomes effective only when it is communicated to and received by Shyam. Since Shyam had not received the revocation letter at the time of selling the laptops, his authority to sell on behalf of Rama was still valid. Hence, the sale of laptops conducted by Shyam is binding on Rama. \n(2) Shyam is entitled to receive his commission for the sales made while he still had the authority to sell. Since he sold the laptops before receiving the revocation, he is entitled to his commission as per the initial agreement with Rama.\nAmount of Commission: Shyam sold 5 laptops at the price fixed by Rama, which is `1 lakh each. The total sales amount to `5 lakh. The agreed commission rate is 11% i.e. ` 55,000.\nOR\nIn the instant case, Vijay was appointed by Ajay to sell his electronic goods and for which Vijay will be given 10% commission on the sale price. Subsequently, Ajay revokes Vijay’s authority by sending the letter to Vijay on 3rd March which was received by Vijay on 7th March. But on 5th March, Vijay already sold the goods worth ` 1,20,000. He claimed for commission from Ajay, but Ajay refused. \nSince, Vijay came to know about revocation of agency after selling the goods, and so therefore, he has right to claim the commission from Ajay.