Section 200 The Indian Contract Act, 1872
Section 200 of the Indian Contract Act, 1872 states:
"Termination of authority."
An agency is terminated:by the principal revoking his authority;
or by the agent renouncing the business of the agency;
or by the business of the agency being completed;
or by either the principal or agent dying or becoming of unsound mind;
or by the principal being adjudicated an insolvent under the provisions of any law for the time being in force for the relief of insolvent debtors.
🔍 Explanation:
Section 200 outlines the various ways in which an agency relationship can come to an end. These include both voluntary and involuntary modes of termination.
✅ Key Modes of Termination:
Revocation by the principal – The principal can withdraw the authority given to the agent.
Renunciation by the agent – The agent can decide to stop acting on behalf of the principal.
Completion of business – When the objective of the agency is fulfilled.
Death or unsoundness of mind – If either party dies or becomes mentally unfit.
Insolvency of the principal – If the principal is declared insolvent, the agency terminates.
🧑⚖️ Example:
Mr. A appoints Mr. B as his agent to sell a property.
If Mr. A sells the property himself, he may revoke B’s authority.
If B refuses to act anymore, he may renounce the agency.
If the property is sold by B, the agency is naturally terminated.
If A dies or becomes insane, the agency ends immediately.
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