Section 120 The Indian Contract Act, 1872
📜 Section 120 – The Indian Contract Act, 1872
Section 120 of the Indian Contract Act, 1872 is part of the chapter on Agency.
🧾 Section 120 – Agent Cannot Personally Enforce, Nor be Bound by, Contracts on Behalf of Principal
"In the absence of any contract to that effect, an agent cannot personally enforce contracts entered into by him on behalf of his principal, nor is he personally bound by them."
✅ Explanation:
This section means that when an agent makes a contract on behalf of the principal, the agent:
Cannot sue the third party in his own name to enforce the contract, and
Cannot be sued personally by the third party,
unless there is an express or implied agreement to that effect.
🔑 Key Points:
The agent is only a representative.
The legal obligations arising from the contract are between the principal and the third party, not the agent.
If the agent wants to enforce or be bound by the contract, there must be a special agreement stating so.
🧑⚖️ Illustration:
If an agent signs a sales contract with a buyer on behalf of a company, and there’s no clause saying the agent is personally liable, then:
The buyer cannot sue the agent for non-performance.
The agent cannot sue the buyer personally either.
📌 Exception (Implied or Express Agreement):
If the agent signs the contract without disclosing that they are acting on behalf of a principal, or if the contract explicitly states the agent is personally liable, Section 230 will apply (agent personally liable in certain cases).
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