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Section 185: Consideration not necessary for agency

Indian Contract Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1872
Section 184 All 266 Sections of Indian Contract Act Section 186

Legal Commentary & Landmark Judgments: Section 185

Section 185 enacts an express exception to the general doctrine of consideration, declaring that no consideration is necessary to create a legally binding and enforceable contract of agency.

  • Statutory Exception to Section 25: Dispenses entirely with the requirement of consideration for the constitution of an agency relationship, overriding the general rule of ex nudo pacto non oritur actio.
  • Consensual Foundation of Mandate: The relationship of principal and agent arises from mutual consent and the principal's conferral of representative authority, rather than any commercial quid pro quo.
  • Enforceability of Gratuitous Agency Fiduciary Duties: A gratuitous agent who undertakes a task without commission is bound by the same fiduciary obligations of loyalty, good faith, and accountability to the principal as a paid commercial agent.
Key Landmark Precedents:
  • Kedarnath Bhattacharji v. Gorie Mahomed (1886) ILR 14 Cal 64: The Calcutta High Court affirmed that contractual and representative agency liabilities can be validly constituted and enforced without separate consideration under Section 185.
  • De Bussche v. Alt (1878) 8 Ch D 286: The Court of Appeal recognized that fiduciary duties of an agent to account for secret profits and faithfully execute authority arise from the relationship itself, regardless of consideration.
  • Lallan Prasad v. Rahmat Ali AIR 1967 SC 1322: The Supreme Court noted that statutory obligations under Chapter X of the Contract Act govern the parties once the agency relationship is established, without requiring independent consideration.
Courtroom Practice & Strategic Litigation Guidance:

In pleadings, never demur that an agency agreement lacked consideration. Gratuitous powers of attorney, family agency arrangements, and informal commercial representations are completely valid under Section 185. A defense asserting 'lack of consideration' against an agent's authority will be summarily struck down.

Section 184 All 266 Sections of Indian Contract Act Section 186