Who is an ‘agent’?

The term ‘agent’ is defined in Section 182 of The Indian Contract Act as “a person employed to do any act for another, or to represent another in dealing with third persons“.
The person for whom such act is done, or who is so represented, is called the ‘principal‘.

Section 226 of The Indian Contract Act

Contracts entered into through an agent, and obligations arising from acts done by an agent, may be enforced in the same manner, and will have the same legal consequences, as if the contracts had been entered into and the acts done by the principal in person.”

Agency is terminated when:

  • the principal revokes the agent’s authority;
  • the agent renounces the business of the agency;
  • the business of the agency is completed;
  • either the principal or the agent dies or becomes of unsound mind; or
  • the principal is adjudicated an insolvent under any law for the time being in force for the relief of insolvent debtors.

Ostensible Authority (Section 237)

When an agent has, without authority, done acts or incurred obligations to third persons on behalf of his principal, the principal is bound by such acts or obligations, if he has by his words or conduct induced such third persons to believe that such acts and obligations were within the scope of the agent’ s authority“.

Case List


Bolton Partners v. Lambert   (1889) 41 Ch D 295   [Summary]

Keighley Maxted & Co. v. Durant    [1901] AC 240   [Summary]   

Ostensible Authority

Harshad J. Shah & Anr v. L.I.C. of India & Ors.   1997 (5) SCC 64   [Summary]   [Full Text]

Rights of Agents

Narandas Morardas Gaziwala & Ors. v. S. P. Am. Papammal & Anr.   1966 SCR 38   [Summary]   [Full Text]