Section 215 The Indian Contract Act, 1872
Section 215 of the Indian Contract Act, 1872 states:
"Right of principal when agent deals, on his own account, in business of agency without principal’s consent."
If an agent deals on his own account in the business of the agency, without first obtaining the consent of his principal and acquainting him with all material circumstances which have come to his own knowledge on the subject, the principal may:Repudiate the transaction if the case shows that any material fact has been dishonestly concealed from him by the agent, or that the dealings of the agent have been disadvantageous to him.
🔍 Explanation:
Section 215 protects the interests of the principal in cases where an agent secretly acts for their own benefit in the course of the agency.
If:
An agent uses their position to act in their own interest, and
Fails to obtain informed consent from the principal, and
Conceals important facts or acts dishonestly,
Then the principal has the right to repudiate (cancel) the transaction.
✅ Key Conditions:
The agent must disclose all material facts.
The agent must obtain the principal’s consent before acting on their own account.
If these are not done, and if the action harms the principal or involves dishonesty, the principal can reject the transaction.
🧑⚖️ Example:
Mr. A instructs Mr. B (his agent) to buy land for him. Mr. B buys the land in his own name without informing A, knowing the land value will rise. If A finds out, he can repudiate the transaction under Section 215, especially if B concealed material facts or caused A a loss.
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