Section 235 Contract Act: Liability of pretended agent

Section 235 of Indian Contract Act: Liability of pretended agent

Official Bare Act Text

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

A person untruly representing himself to be the authorised agent of another, and thereby inducing a third person to deal with him as such agent, is liable, if his alleged employer does not ratify his acts, to make compensation to the other in respect of any loss or damage which he has incurred by so dealing.

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

Contract Sec 2(h)

Legal Commentary & Landmark Judgments: Section 235

A person untruly representing themselves to be the authorized agent of another, and thereby inducing a third person to deal with them as such agent, is liable, if their alleged employer does not ratify their acts, to make compensation to the other in respect of any loss or damage which they have incurred by so dealing. This provision codifies the doctrine of breach of implied warranty of authority.

Core Legal Standard: Section 235 establishes the liability of a person untruthfully representing themselves to be an authorized agent, obligating them to compensate the third party for any loss suffered due to unauthorized acts.
Pretended Agent Liability: Real estate conveyances, an individual who executes contracts claiming authority they do not possess is strictly liable to compensate the third party for all direct reliance losses and expectation damages if the principal refuses to ratify.

Key Landmark Precedents:

Collen v. Wright (1857) 8 E&B 647: The landmark English decision laying down that a person who professes to act as agent impliedly warrants that he has authority; if he lacks authority, he is liable for breach of warranty of authority regardless of bona fide belief.
V.P.R.V. Chockalingam Chettiar v. A.V.P.L. Chidambaram Chettiar (AIR 1938 PC 184): The Privy Council affirmed that Section 235 provides an exhaustive statutory remedy against an unauthorized agent who induces a third party to enter an unratified contract.

Legal Commentary:

Section 235 applies even if the agent acted innocently or honestly believed they possessed authority. Corporate officers who sign multi-million rupee agreements without requisite board approvals can be held personally liable under Section 235 for damages suffered by the counterparty.

Section 235: Liability of pretended agent

Section 235 of Indian Contract Act: Liability of pretended agent

Legal Commentary & Landmark Judgments: Section 235