Section 213: Duty to render proper accounts

Rule and business relevance

The obligation supports reconciliation of receipts, payments and agency business. Records should allow the principal to understand what was done with entrusted funds or property.

Limits and related provisions

A summary number without supporting detail may not establish proper accounting. The precise accounts required depend on the agency and applicable records.

Hypothetical business example

Hypothetical example: A principal asks a purchasing agent to account for advances, invoices, expenses and unused funds. The agent supplies a reconciled record.

Practical decision flow

Identify the period and business covered by the demand.

Reconcile receipts, payments and balances.

Provide proper accounts supported by the relevant documents.

• India Code: Contract Act, section 213

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

Glossary

Proper accounts

Accounts adequately recording the relevant agency dealings.

Demand

The principal’s request triggering the stated duty.

Frequently asked questions