Section 227 The Indian Contract Act, 1872
Section 227 of the Indian Contract Act, 1872 deals with the Principal’s liability when agent acts with authority.
🔹 Section 227 – Principal bound when agent acts with authority
"When an agent does more than he is authorized to do, and what he does beyond the scope of his authority cannot be separated from what is within it, the principal is not bound to recognize the transaction at all."
🔍 Explanation:
If an agent acts partly within and partly outside his authority, and the parts cannot be separated, then the principal is not bound by any part of the transaction.
However, if the authorized and unauthorized parts can be separated, the principal is only bound by the authorized part (covered in Section 228).
📌 Example:
A authorizes B to buy 100 chairs.
B buys 100 chairs and 50 tables in one inseparable deal.
Since buying tables was unauthorized and the contract can’t be split, A (the principal) is not bound by any part of the transaction — not even for the chairs.
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