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.
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 BizeneedLast updated 10 October 2026