Chapter X - Agency
Section 206
Section 206: Reasonable termination notice
Revocation or renunciation requires reasonable notice; otherwise the resulting damage must be made good.
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Need advice on Section 206?
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
Reasonable notice must be given of such revocation or renunciation, otherwise the damage thereby resulting to the principal or the agent, as the case may be, must be made good to the one by the other.
Rule and business relevance
The notice duty operates in both directions, depending on whether principal or agent ends the relationship. The measure is damage resulting from failure to give reasonable notice.
Limits and related provisions
No universal notice period is specified here. Assess reasonableness against the actual arrangement and circumstances, together with any lawful contractual terms.
Hypothetical business example
Hypothetical example: An agent abruptly stops managing a transaction without reasonable notice, causing avoidable handover loss. The causal damage and notice circumstances require review.
Practical decision flow
Identify the required notice in the arrangement and circumstances.
Record what notice was actually given and when.
Connect claimed damage to the notice failure.
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 required notice in the arrangement and circumstances.
- Record what notice was actually given and when.
- Connect claimed damage to the notice failure.
Avoid
- No universal notice period is specified here. Assess reasonableness against the actual arrangement and circumstances, together with any lawful contractual terms.
Glossary
- Reasonable notice
- Notice adequate in the relevant circumstances, without a fixed period in this section.
- Resulting damage
- Damage caused by failure to give that notice.
Frequently asked questions
Does the Act prescribe one number of days here?
No. It uses reasonable notice.
Does only the principal have to give notice?
No. Both revocation and renunciation are addressed.
Is every alleged loss automatically recoverable?
The section concerns damage resulting from the notice failure.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026