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Section 246: Sections 239 to 266 [Repealed by the Indian Partnership Act, 1932]

Indian Contract Act • Official Statutory Text & Practice Guide

Statutory Regulation
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Act 1872
Section 75 All 266 Sections of Indian Contract Act Section 77

Legal Commentary & Landmark Judgments: Section 246

Section 246 historically codified the rule that a representation of partnership made specifically to a particular person renders the representor liable solely to that individual who extended credit on that faith, now incorporated within Section 28 of the Indian Partnership Act, 1932.

  • Targeted Representation vs. General Holding Out: Distinguished between representations made to the public at large and private representations addressed exclusively to an identified creditor.
  • Privity of Estoppel: The statutory estoppel created under Section 246 was strictly personal to the recipient of the targeted representation; third-party creditors who were unaware of the statement could not invoke it.
  • Modern Synthesis in Section 28 IPA 1932: Repealed by Act 9 of 1932 and incorporated within the broader scope of Section 28 of the Indian Partnership Act, which covers representations made either specifically or generally.
Key Landmark Precedents:
  • Edmunds v. Bushell (1865) LR 1 QB 1: The Queen's Bench affirmed that a representation of partnership made to a specific business house fastens liability only in respect of transactions undertaken with that particular merchant.
  • Baring v. Corrie (1818) 2 B&Ald 137: Established that representations made to an individual counterparty create an estoppel limited strictly to the four corners of that private transaction.
  • Scarf v. Jardine (1882) 7 App Cas 345: The House of Lords highlighted the distinction between general notice and targeted representations to old customers dealing with firms.
Courtroom Practice & Strategic Litigation Guidance:

When resisting a broad class of creditor claims against a defendant who gave a letter of comfort or assurance to a single supplier, invoke the targeted representation doctrine to defeat attempts by other suppliers to bootstrap their claims under Section 28 of IPA 1932.

Section 75 All 266 Sections of Indian Contract Act Section 77