Section 223 The Indian Contract Act, 1872
Section 223 – The Indian Contract Act, 1872
Title: Agent to be indemnified against consequences of acts done in good faith
📜 Bare Act Language:
"Where one person employs another to do an act, and the agent does the act in good faith, the employer is liable to indemnify the agent against the consequences of that act, though it causes an injury to the rights of third persons."
🔍 Explanation:
Section 223 reinforces the protection of agents when they act in good faith under their principal’s instructions:
If an agent follows instructions in good faith, and it harms a third party,
The principal must compensate (indemnify) the agent for any legal consequences or loss.
This holds even if the act unintentionally infringes on someone else’s rights.
🧠 Key Points:
The act must be:
Done on the principal’s instructions.
Performed in good faith.
The agent is not liable if he/she was just doing what was asked.
The principal cannot escape liability just because someone else was affected.
⚖️ Example:
A (principal) tells B (agent) to take possession of certain land. B does so, believing A is the rightful owner.
Later, it turns out the land belongs to C, who sues B.
→ A must indemnify B, because B acted in good faith under A’s orders.
🔗 Difference from Section 222:
Section 222: Covers indemnity for lawful acts.
Section 223: Covers indemnity for good faith acts, even if they unintentionally cause harm.
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