Section 217 The Indian Contract Act, 1872
Section 217 – The Indian Contract Act, 1872
📘 Title: Agent’s right of retainer out of sums received on principal’s account
🔹 Bare Act Language:
"An agent may retain, out of any sums received on account of the principal in the business of the agency, all moneys due to himself in respect of advances made or expenses properly incurred by him in conducting such business, and also such remuneration as may be payable to him for acting as agent."
🔍 Explanation:
This section gives the agent a legal right to retain money received on behalf of the principal, before handing over the balance, in order to cover:
✅ Advances made by the agent,
✅ Properly incurred expenses, and
✅ Remuneration (commission or salary) for their service.
So, the agent is not bound to immediately hand over all money to the principal without first deducting their dues.
✅ Example:
A appoints B as an agent to sell goods.
B sells the goods and receives ₹1,00,000.
B spent ₹10,000 on transport and is owed ₹5,000 commission.
👉 B can retain ₹15,000 and hand over ₹85,000 to A.
📌 Key Points:
Protects the agent’s right to recover legitimate dues.
Applies only to money received in the course of agency business.
Expenses must be proper and necessary.
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