Section 166 The Indian Contract Act, 1872
Section 166 of the Indian Contract Act, 1872 deals with the liability of principal for acts of agent.
🔹 Section 166 – Liability of principal for acts of agent
"When a person does any act in the name, or on behalf, of another person, and with the latter’s authority, the act is said to be done by the agent of that other person, and the other person is said to be the principal."
✅ Explanation:
If a person (agent) acts with the authority of another (principal), the principal is bound by those acts.
The principal is liable for all acts done by the agent within the scope of their authority.
This section establishes the foundation of agency — that agents act on behalf of principals.
📌 Example:
A authorizes B to buy goods on his behalf.
B purchases goods from C.
A (principal) is liable to pay C because B acted as A’s agent with proper authority.
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