Chapter X - Agency
Section 209
Section 209: Protection after death or incapacity
After termination caused by the principal’s death or unsoundness of mind, the agent must take reasonable protective steps for the entrusted interests.
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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
When an agency is terminated by the principal dying or becoming of unsound mind, the agent is bound to take, on behalf of the representatives of his late principal, all reasonable steps for the protection and preservation of the interests entrusted to him.
Rule and business relevance
The steps are taken on behalf of the late principal’s representatives and concern protection and preservation of what was entrusted.
Limits and related provisions
This protective duty is not an unrestricted authority to begin new business. Identify reasonable safeguarding action and proper representative instructions.
Hypothetical business example
Hypothetical example: After learning of a principal’s death, an agent secures entrusted stock and records while arranging a lawful handover to representatives.
Practical decision flow
Confirm the termination event.
Identify entrusted assets and immediate risks.
Take reasonable preservation steps and arrange representative handover.
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
- Confirm the termination event.
- Identify entrusted assets and immediate risks.
- Take reasonable preservation steps and arrange representative handover.
Avoid
- This protective duty is not an unrestricted authority to begin new business. Identify reasonable safeguarding action and proper representative instructions.
Glossary
- Preservation
- Safeguarding the interests entrusted to the agent.
- Representatives
- The persons on whose behalf the specified protective duty is performed.
Frequently asked questions
Does the agent simply abandon entrusted interests?
No. Reasonable protection and preservation are required.
Does this authorise unrelated new transactions?
The provision concerns protective steps for entrusted interests.
Which termination events are named?
Death or unsoundness of mind of the principal.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026