Section 117 The Indian Contract Act, 1872
Section 117 of the Indian Contract Act, 1872 deals with:
"Contract with agent without consideration."
No consideration is necessary to create an agency.
🔎 Explanation:
This section establishes that an agency can be created without any consideration. In simple terms, a principal can appoint a person as their agent even if no payment or reward is promised or exchanged for that appointment.
This is an exception to the general rule under the Indian Contract Act that an agreement without consideration is void (Section 25). Agency is a special case where consideration is not mandatory.
✅ Key Points:
An agent can be appointed gratuitously (i.e., without compensation).
Once appointed, the agent has legal authority to act on behalf of the principal.
The agent is bound to act with reasonable care and loyalty, even if unpaid.
The principal is also bound by the acts of the agent done within the scope of authority.
🧑⚖️ Example:
Mr. A asks his friend Mr. B to negotiate a land deal on his behalf. Mr. B agrees to act as A’s agent, without expecting any payment. This arrangement is valid under Section 117, even though no consideration was exchanged.
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