Section 245 The Indian Contract Act, 1872
Section 245 of the Indian Contract Act, 1872 states:
"Effect of non-disclosure of facts by agent to principal."
Where an agent, without the knowledge or consent of his principal, receives any property or pecuniary benefit in the course of the agency, the principal is entitled to recover such property or benefit.
🔍 Explanation:
This section protects the principal’s rights when the agent gains benefits secretly during the agency.
If the agent receives property or money related to the agency without informing or getting consent from the principal,
The principal has the right to claim that property or benefit from the agent.
This prevents the agent from profiting secretly at the expense of the principal.
✅ Key Points:
Applies to secret profits or benefits acquired by the agent.
The agent must account to the principal for such benefits.
It promotes transparency and trust in agency relationships.
🧑⚖️ Example:
If Mr. A appoints Mr. B as his agent to buy machinery and B secretly receives a commission or gift from the seller without A’s knowledge, A can claim that commission or gift under Section 245.
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