Home  /  Indian Contract Act  /  Section 245

Section 245: Sections 239 to 266 [Repealed by the Indian Partnership Act, 1932]

Indian Contract Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1872
Section 75 All 266 Sections of Indian Contract Act Section 77

Legal Commentary & Landmark Judgments: Section 245

Section 245 historically governed liability arising from passive holding out, holding a person liable if he knowingly permitted himself to be represented as a partner, now consolidated within Section 28(1) of the Indian Partnership Act, 1932.

  • Liability by Knowing Acquiescence: A person who stands by with knowledge that he is being held out as a partner and fails to contradict the representation is treated in law as having authorized the representation.
  • Requirement of Knowledge: Liability cannot attach under Section 245 without proving that the individual possessed actual or imputed awareness that the representation was being made to the commercial public or creditor.
  • Consolidation in Section 28 IPA 1932: Repealed by Act 9 of 1932 and integrated into the unified statutory doctrine of estoppel under Section 28(1) of the Indian Partnership Act, 1932.
Key Landmark Precedents:
  • Tower Cabinet Co. Ltd. v. Ingram [1949] 2 KB 397: The King's Bench held that an erstwhile partner whose name inadvertently remained on old notepaper without his knowledge or consent did not 'knowingly suffer' himself to be represented as a partner under holding out principles.
  • Dickinson v. Valpy (1829) 10 B&C 128: Landmark holding out authority establishing that if a person represents himself, or knowingly permits himself to be represented, as a partner, he is liable to anyone who gave credit on the faith of that representation.
  • Scarf v. Jardine (1882) 7 App Cas 345: Reaffirmed that passive acquiescence in commercial trade names binds the retiring partner on principles of holding out evolved from Section 245.
Courtroom Practice & Strategic Litigation Guidance:

When defending against holding out allegations based on old stationary or directory listings, plead lack of knowledge and absence of consent. Establish that the individual did not 'knowingly permit' the representation, citing *Tower Cabinet Co. Ltd.*

Section 75 All 266 Sections of Indian Contract Act Section 77