Section 204 The Indian Contract Act, 1872
Section 204 of The Indian Contract Act, 1872 deals with the revocation of an agent’s authority.
📜 Section 204 – Revocation of authority
"The principal may, save as is otherwise provided by the last preceding section, revoke the authority given to his agent at any time before the authority has been exercised so as to bind the principal."
✅ Explanation:
The principal has the right to revoke (cancel) the agent’s authority.
However, this revocation must happen before the agent has exercised the authority in a way that binds the principal.
Once the agent has lawfully acted and created obligations on behalf of the principal, the authority cannot be revoked for that act.
🔗 Exception:
This section must be read with Section 202, which says that agency coupled with interest cannot be revoked without the agent’s consent.
📌 Illustration:
A authorizes B to sell his goods.
Before B finds a buyer, A can revoke the authority.
But if B has already entered into a binding contract with a buyer, A cannot revoke the authority regarding that sale.
⚖️ Case Reference:
Pestonji v. Manekji – The court held that revocation must not cause loss to the agent, especially when the agent has already acted upon the authority.
RELATED Blog
0 comments