Section 177 The Indian Contract Act, 1872
Section 177 – Indian Contract Act, 1872
Title: Termination of agency by the principal’s death or insanity
Bare Act Language:
Section 177.
An agency is terminated by the death or insanity of the principal, except in cases where the agency is coupled with an interest.
🔍 Explanation:
Normally, when the principal dies or becomes insane, the agency relationship ends automatically because the authority to act is personal.
Exception: If the agency is coupled with an interest (meaning the agent has a legal interest in the subject matter), the agency does not terminate on the principal's death or insanity.
✅ Key Points:
Personal nature of agency means it usually depends on the principal’s capacity.
Death or insanity of the principal revokes the agent’s authority immediately.
Agency coupled with interest (Section 162) remains valid despite death/insanity.
🧑⚖️ Example:
A appoints B as agent to manage his property.
A dies.
The agency ends, and B cannot act as agent anymore, unless the agency was coupled with interest.
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