Chapter X - Agency
Section 188
Section 188: Extent of incidental authority
Authority to perform an act includes lawful things necessary to perform it; authority to conduct a business also includes lawful things usually done in conducting it.
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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, having an authority to do an act, has authority to do every lawful thing which is necessary in order to do such act.
An agent having an authority to carry on a business, has authority to do every lawful thing necessary for the purpose, or usually done in the course, of conducting such business.
Illustrations
(a) A is employed by B, residing in London, to recover at Bombay a debt due to B. A may adopt any legal process necessary for the purpose of recovering the debt, and may give a valid discharge for the same.
(b) A constitutes B his agent to carry on his business of a ship-builder. B may purchase timber and other materials, and hire workmen, for the purpose of carrying on the business.
Rule and business relevance
The provision links incidental authority to the entrusted act or business. Its illustrations include lawful debt-recovery process and purchasing materials for an authorised shipbuilding business.
Limits and related provisions
Necessity or ordinary business practice is not authority to do unlawful things. Also check the actual scope of the entrusted business and any relevant restrictions.
Hypothetical business example
Hypothetical example: A representative authorised to run a workshop buys ordinary materials needed for its work. The purchase is assessed as an incident of the entrusted business.
Practical decision flow
Identify the act or business entrusted.
Assess whether the incidental act is necessary or usually done in that business.
Confirm its lawfulness and any applicable authority limits.
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 the act or business entrusted.
- Assess whether the incidental act is necessary or usually done in that business.
- Confirm its lawfulness and any applicable authority limits.
Avoid
- Necessity or ordinary business practice is not authority to do unlawful things. Also check the actual scope of the entrusted business and any relevant restrictions.
Glossary
- Incidental authority
- Authority for lawful acts necessary to carry out the authorised task.
- Usual business act
- A lawful act ordinarily done in conducting the entrusted business.
Frequently asked questions
Does authority include unlawful methods?
No. Both limbs expressly refer to lawful things.
Is a necessary supporting act relevant?
Yes. The first limb covers lawful things necessary to do the authorised act.
Does business authority extend beyond literal instructions?
It can include lawful necessary or usual acts within the entrusted business.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026