Chapter X - Agency
Section 203
Section 203: Revocation before binding exercise
A principal may generally revoke authority before it has been exercised so as to bind the principal, subject to section 202.
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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
The principal may, save as is otherwise provided by the last preceding section, revoke the authority given to his agent at any time before the authority has been exercised so as to bind the principal.
Rule and business relevance
The timing of an agent’s binding act is central. Revocation should be coordinated with rules on partial exercise, notice and compensation.
Limits and related provisions
A general power to revoke does not remove protected interests, existing obligations or consequences of inadequate notice.
Hypothetical business example
Hypothetical example: Before an authorised purchase is made, a principal withdraws the buying authority. The principal checks that no binding commitment has already arisen and communicates the change.
Practical decision flow
Check for an interest protected under section 202.
Establish whether authority has already been exercised to bind the principal.
Give the required communication and review notice or compensation obligations.
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
- Check for an interest protected under section 202.
- Establish whether authority has already been exercised to bind the principal.
- Give the required communication and review notice or compensation obligations.
Avoid
- A general power to revoke does not remove protected interests, existing obligations or consequences of inadequate notice.
Glossary
- Revocation
- Withdrawal of authority by the principal.
- Binding exercise
- Use of authority producing an obligation for the principal.
Frequently asked questions
Is the right to revoke absolute?
No. Section 202 and the surrounding rules qualify it.
Why does transaction timing matter?
The section focuses on authority not yet exercised so as to bind the principal.
Can notice duties still apply?
Yes. Section 206 requires reasonable notice in its setting.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026