Section 198 The Indian Contract Act, 1872
Section 198 – The Indian Contract Act, 1872
📜 Title: "Principal's responsibility to agent appointed by him"
Text of Section 198:
"Where an agent has been appointed by the principal, or by his authority, the principal is bound by the acts of the agent as if he had done them himself."
🔍 Explanation of Section 198:
This section deals with the legal responsibility of a principal for the actions of an agent they have appointed.
🧠 Key Points:
Authority to Act:
If an agent is appointed by the principal (directly or indirectly), then:
Any lawful acts done by that agent within the scope of their authority are binding on the principal.
Legal Consequence:
The principal cannot deny responsibility for acts of the agent that were done with proper authority.
⚖️ Illustration:
A appoints B as his agent to buy goods.
B buys goods from C on behalf of A.
A is bound to pay C, as if he had personally made the purchase.
🔑 Why It Matters:
Ensures that principals cannot escape liability for actions done on their behalf.
Promotes trust and clarity in business and contractual dealings involving agents.
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