Press / to search

Chapter X - Agency

Section 194

Section 194: Agents selected for the principal

A person duly named by an authorised agent to act for the principal can be the principal’s own agent rather than a sub-agent.

On this page

Need advice on Section 194?

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.

Contact us

Statutory text

Bare law

Where an agent, holding an express or implied authority to name another person to act for the principal in the business of the agency, has named another person accordingly, such person is not a sub-agent, but an agent of the principal for such part of the business of the agency as is entrusted to him.

Illustrations

(a)A directs B, his solicitor, to sell his estate by auction, and to employ an auctioneer for the purpose. B names C, an auctioneer, to conduct the sale. C is not a sub-agent, but is A’s agent for the conduct of the sale.

(b)A authorizes B, a merchant in Calcutta, to recover the moneys due to A from C & Co. B instructs D, a solicitor, to take legal proceedings against C & Co. for the recovery of the money. D is not a sub-agent, but is solicitor for A.

Rule and business relevance

The naming agent must have express or implied authority to select the person for the relevant agency business. The selected person then acts for the principal for the entrusted part.

Limits and related provisions

Distinguish authority to select a direct agent from unauthorised delegation of personal work. The statutory illustrations involve an auctioneer and a solicitor.

Hypothetical business example

Hypothetical example: An owner authorises a representative to choose an auctioneer for a sale. The duly selected auctioneer acts as the owner’s agent for that sale.

Practical decision flow

Establish authority to name another person.

Identify the part of the business entrusted to the appointee.

Record the direct relationship with the principal.

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

  • Establish authority to name another person.
  • Identify the part of the business entrusted to the appointee.
  • Record the direct relationship with the principal.

Avoid

  • Distinguish authority to select a direct agent from unauthorised delegation of personal work. The statutory illustrations involve an auctioneer and a solicitor.

Glossary

Substituted agent
A common description of the principal’s agent duly selected under this provision.
Naming authority
Express or implied authority to choose another person for the principal.

Frequently asked questions

Is every person chosen by an agent a sub-agent?

No. This provision expressly describes a different relationship.

Must selection authority exist?

Yes. Express or implied authority is required.

Does the appointee become agent for all business?

The section relates to the part of the agency business entrusted to that person.

Need help applying this provision to your situation?

Contact Bizeneed

Last updated 10 October 2026