Chapter X - Agency
Section 182
Section 182: Agent and principal
Agency involves acting for another person or representing that person in dealings with third parties.
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This article is for general information. Refer to the Indian Contract Act, 1872 official text for the official provisions. If you need professional advice for your situation, contact Bizeneed.
Statutory text
Bare law
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”.
Rule and business relevance
The person doing the act or representation is the agent; the represented person is the principal. A commercial label alone does not establish the actual scope of agency.
Limits and related provisions
An agency relationship is distinct from deciding how much authority the agent has. The surrounding provisions govern authority, duties and effects on third parties.
Hypothetical business example
Hypothetical example: A business appoints a purchasing representative to negotiate with suppliers on its behalf. The business is the principal for the entrusted agency.
Practical decision flow
Identify whose act or representation is involved.
Identify the represented principal and the agent.
Record the entrusted business and limits of authority.
Check the applicable legal framework
This guide explains the central provision. Applicable State amendments, the agreement, transaction date and other governing laws can affect its application. Check the current legal framework before relying on it for a commercial decision.
Practical checklist
Do
- Identify whose act or representation is involved.
- Identify the represented principal and the agent.
- Record the entrusted business and limits of authority.
Avoid
- An agency relationship is distinct from deciding how much authority the agent has. The surrounding provisions govern authority, duties and effects on third parties.
Glossary
- Agent
- A person employed to act for or represent another in the stated way.
- Principal
- The person for whom the act is done or who is represented.
Frequently asked questions
Does the word agent on a business card settle authority?
No. The actual relationship and authority must be established.
Must representation concern third persons?
Representation in third-party dealings is one limb; doing an act for another is also stated.
Does this definition decide every liability question?
No. Other agency provisions address those consequences.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026