Chapter X - Agency
Section 201
Section 201: How agency ends
Agency can end through revocation, renunciation, completion or the personal and insolvency events listed in the section.
On this page
Need advice on Section 201?
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 agency is terminated by the principal revoking his authority; or by the agent renouncing the business of the agency; or by the business of the agency being completed; or by either the principal or agent dying or becoming of unsound mind; or by the principal being adjudicated an insolvent under the provisions of any Act for the time being in force for the relief of insolvent debtors.
Rule and business relevance
The principal may revoke or the agent renounce; the business may be completed; either may die or become of unsound mind; and adjudicated insolvency of the principal is also specified.
Limits and related provisions
Read the interest-protection rule in section 202 and the knowledge rule in section 208. An ending event does not automatically answer every third-party or accrued-obligation question.
Hypothetical business example
Hypothetical example: A project agency finishes when the entrusted business is completed. The parties still reconcile accounts and notify relevant counterparties where needed.
Practical decision flow
Identify the termination event.
Check any protected interest or accrued obligation.
Record communications, handover and final accounts.
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 termination event.
- Check any protected interest or accrued obligation.
- Record communications, handover and final accounts.
Avoid
- Read the interest-protection rule in section 202 and the knowledge rule in section 208. An ending event does not automatically answer every third-party or accrued-obligation question.
Glossary
- Renunciation
- The agent’s withdrawal from the agency business.
- Completion
- Completion of the entrusted business as a termination event.
Frequently asked questions
Does only revocation end agency?
No. The provision lists several other events.
Does it mention insolvency of either party identically?
The insolvency limb specifically names the principal.
Must section 208 also be considered?
Yes. It governs when termination takes effect as regards the agent and third persons.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026