Right of principal when agent deals, on his own account, in business of agency without principal‟s consent
Chapter 11: Agency
If an agent deals on his own account in the business of the agency, without first obtaining the consent of his principal and acquainting him with all material circumstances which have come to his own knowledge on the subject, the principal may repudiate the transaction, if the case shows, either that any material fact has been dishonestly concealed from him by the agent, or that the dealings of the agent have been disadvantageous to him.
Illustrations.
(a)A directs B to sell A‟s estate. B buys the estate for himself in the name of C. A, on discovering that B has bought the estate for himself, may repudiate the sale, if he can show that B has dishonestly concealed any material fact, or that the sale has been disadvantageous to him. (b)A directs B to sell A‟s estate B, on looking over the estate before selling it, finds a mine on the estate which is unknown to A. B informs A that he wishes to buy the estate for himself, but conceals the discovery of the mine. A allows B to buy, in ignorance of the existence of the mine. A, on discovering that B knew of the mine at the time he bought the estate, may either repudiate or adopt the sale at his option.
The Indian Contract Act, 1872 (Act No. 9 of 1872). From the updated text on India Code, with later amendments. Being checked against the official copy; amendment notes are not shown yet.
Related sections
- 212Skill and diligence required from agent
- 213Agent‟s accounts
- 214Agent‟s duty to communicate with principal
- 216Principal‟s right to benefit gained by agent dealing on his own account in business of agency
- 217Agent‟s right of retainer out of sums received on principal‟s account
- 218Agent‟s duty to pay sums received for principal