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.…

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. In the instant case, (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. (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. Amount of Commission: Shyam sold5laptops at the price fixed by Rama, which is 1lakh each. The total sales amount to 5 lakh. The agreed commission rate is11% i.e.55,000.