Section 201 The Indian Contract Act, 1872
Section 201 – The Indian Contract Act, 1872
"Termination of agency."
Bare Act Language:
"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 201 states the various circumstances under which an agency relationship comes to an end:
Revocation by the Principal
– The principal can withdraw the authority granted to the agent.
Renunciation by the Agent
– The agent can resign or refuse to act further.
Completion of Business
– If the purpose of the agency is fulfilled, the agency ends automatically.
Death or Mental Incapacity
– The death or mental unsoundness of either party (principal or agent) ends the agency.
Insolvency of the Principal
– If the principal is legally declared insolvent, the agency is terminated.
📌 Example:
A appoints B to sell his land.
– Once the land is sold, the agency ends (completion of business).
– If A dies or becomes insane before the sale, the agency also ends.
🔁 Related Sections:
Section 202 – Agent's authority when it is coupled with interest
Section 203–210 – Cover the rules regarding revocation and notice
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