Section 254 The Indian Contract Act, 1872
📜 Section 254 – The Indian Contract Act, 1872
Agent’s right to retain goods until remuneration is paid
"Where an agent has made advances or expended money on behalf of the principal in the due execution of the agency, he has a lien on the goods, securities, or other property of the principal in his possession, for the reimbursement of the amount so advanced or expended."
✅ Explanation:
This section gives an agent a lien (right to retain possession) over the principal’s goods or property that the agent holds if:
The agent has advanced money or incurred expenses while properly performing his duties.
The principal has not yet reimbursed the agent for these expenses.
The agent can hold (retain) possession of goods or property until such reimbursement is made.
🧾 Example:
Suppose an agent transports goods for a principal and pays freight charges out of his own pocket. If the principal refuses or delays reimbursement, the agent can keep the goods until the freight charges are paid.
🔍 Key Points:
| Element | Explanation |
|---|---|
| Agent’s expenses | Money advanced or spent properly |
| Agent’s lien | Right to retain possession |
| Purpose of lien | To secure reimbursement |
| Property subject to lien | Goods, securities, or other items |
⚖️ Legal Importance:
Protects the financial interests of the agent.
Ensures the agent is not unjustly burdened with the principal’s costs.
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