Section 230 The Indian Contract Act, 1872
Section 230 of the Indian Contract Act, 1872 states:
"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
be personally bound by them.
Presumption of contract to contrary — Such a contract shall be presumed to exist in the following cases, unless a contrary intention appears from the contract:
(1) where the contract is made by an agent for the sale or purchase of goods for a merchant resident abroad;
(2) where the agent does not disclose the name of his principal;
(3) where the principal, though disclosed, cannot be sued.
🔍 Explanation:
This section lays down the general rule that:
An agent is not personally liable for contracts made on behalf of the principal,
Nor can the agent personally enforce such contracts,
Unless there is a contract to the contrary or special circumstances apply.
✅ Exceptions (Where agent can be personally liable):
Foreign Principal: Agent contracts for a merchant living abroad.
Undisclosed Principal: Agent does not reveal who the principal is.
Inaccessible Principal: The principal, though named, cannot be sued (e.g., out of jurisdiction or legally incompetent).
In these cases, the law presumes that the agent intended to be personally bound, unless the contract clearly says otherwise.
🧑⚖️ Example:
If Mr. A, an agent, contracts to buy 500 chairs for Mr. B (a disclosed principal), A cannot be sued if B defaults — unless one of the above exceptions applies.
If A did not disclose B’s name, then A can be held personally liable.
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