Section 187 The Indian Contract Act, 1872
Section 187 – The Indian Contract Act, 1872
📘 Title: Definition of Agent and Principal
🔹 Bare Act Language:
“An ‘agent’ is a person employed to do any act for another, or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the ‘principal’.”
🔍 Explanation:
Section 187 defines the two key roles in an agency relationship:
Agent: A person who is authorized to act on behalf of another (the principal).
Principal: The person who authorizes the agent to act for them in dealing with third parties.
This relationship allows the agent's actions to legally bind the principal, as long as the agent acts within their authority.
✅ Example:
A authorizes B, a broker, to buy goods on A's behalf.
Here, B is the agent, and A is the principal.
If B buys goods within A’s instructions, A is bound by that transaction with the seller.
📌 Key Points:
This section introduces agency law under the Indian Contract Act.
The agent can be appointed expressly or impliedly (see Section 186–188).
The agent must act in the interest and authority of the principal.
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