Section 182 Contract Act: 'Agent' and 'principal' defined

Section 182 of Indian Contract Act: 'Agent' and 'principal' defined

Official Bare Act Text

Override / Mandate Mens Rea (Intent) Actus Reus (Conduct) Punishment Limitation Monetary

An "agent" is a person employed to do any act for another, or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the "principal".

Statutory Defined Terms in this Section: (Click any term for official legal definition)

Contract Sec 2(h)

Legal Commentary & Landmark Judgments: Section 182

An agent is a person employed to do any act for another, or to represent another in dealings with third persons, while the person for whom such act is done, or who is so represented, is called the principal. The defining legal characteristic of an agency is the representative capacity of the agent to bind the principal and create direct privity of contract between the principal and third parties.

Core Legal Standard: Section 182 defines an 'agent' as a person employed to do any act for another or represent another in dealings with third persons, and the 'principal' as the person for whom such act is done.
Bail & Custodial Standards: Financial markets, agency is strictly distinguished from other legal relationships: an agent possesses legal authority to alter the principal's legal relations, unlike a mere servant (who is subject to direct physical control over how work is executed), an independent contractor (who undertakes to produce a given result without representative authority), or a bailee (who holds possessory custody without power to contract on the owner's behalf).

Section 182 defines the foundational parameters of agency law, establishing the representative authority of the agent to bind the principal and create direct privity with third parties.

Key Landmark Precedents:

Chairman, Life Insurance Corporation of India v. Rajiv Kumar Bhasker (2005) 6 SCC 188: The Supreme Court held that agency under Section 182 does not require formal documentation or remuneration; where an employer collected insurance premiums from employee salaries under an LIC scheme, the employer acted as the agent of LIC, making LIC liable for defaults.
Ram Prasanna Moulik v. State of West Bengal (AIR 1963 Cal 14): The Calcutta High Court held that the distinguishing mark of an agent under Section 182 is the legal capacity to represent the principal in contractual relations with third parties.

Legal Commentary:

Under Section 185, no consideration is necessary to create an agency. An unpaid, gratuitous agent who acts with authority binds the principal under Section 182 just as effectively as a salaried corporate managing director.

Section 182: 'Agent' and 'principal' defined

Section 182 of Indian Contract Act: 'Agent' and 'principal' defined

Legal Commentary & Landmark Judgments: Section 182