Agency [Sections 182 — 238]

A property broker in Kharghar tells a buyer the owner will accept a particular price, and takes a token amount. The owner never authorised that price. Is the owner bound? Is the broker? Could the buyer have found out? A large part of commerce runs through people who sign, buy, sell and promise on behalf of others, and sections 182 to 238 of the Contract Act decide whose promise it is.

In two minutes

An agent is a person employed to do any act for another or to represent another in dealings with third persons (s.182); an agent acting within authority binds the principal (s.226), and the Act sets out how authority arises, how it ends, what agent and principal owe each other, and who is liable to the third party.

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