Section 186 The Indian Contract Act, 1872
Section 186 – The Indian Contract Act, 1872
“Termination of agency.”
Bare Act Language:
“An agency is terminated by the principal revoking his authority, or by the agent renouncing the business of the agency; or by the business of the agency being completed; or by either the principal or agent dying or becoming of unsound mind; or by the principal being adjudicated an insolvent under the provisions of any law for the time being in force for the relief of insolvent debtors.”
✅ Explanation:
Section 186 outlines the ways an agency relationship comes to an end, which includes:
Revocation by the Principal
– The principal can cancel the agent’s authority.
Renunciation by the Agent
– The agent can voluntarily give up their role.
Completion of Business
– When the purpose for which the agency was created is completed, the agency ends.
Death or Unsoundness of Mind
– If either party dies or becomes mentally incapable, the agency terminates.
Insolvency of Principal
– If the principal is declared insolvent, the agency ends legally.
🧾 Example:
A appoints B as his agent to sell his house.
– If A sells the house himself or revokes B’s authority, the agency ends.
– If B renounces his role or A dies, the agency also terminates.
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