Chapter X - Agency
Section 215
Section 215: Self-dealing and repudiation
Undisclosed self-dealing can give the principal a right to repudiate where dishonest material concealment or disadvantage is shown.
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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
If an agent deals on his own account in the business of the agency, without first obtaining the consent of his principal and acquainting him with all material circumstances which have come to his own knowledge on the subject, the principal may repudiate the transaction, if the case shows, either that any material fact has been dishonestly concealed from him by the agent, or that the dealings of the agent have been disadvantageous to him.
Illustrations
(a)A directs B to sell A’s estate. B buys the estate for himself in the name of C. A, on discovering that B has bought the estate for himself, may repudiate the sale, if he can show that B has dishonestly concealed any material fact, or that the sale has been disadvantageous to him.
(b)A directs B to sell A’s estate B, on looking over the estate before selling it, finds a mine on the estate which is unknown to A. B informs A that he wishes to buy the estate for himself, but conceals the discovery of the mine. A allows B to buy, in ignorance of the existence of the mine. A, on discovering that B knew of the mine at the time he bought the estate, may either repudiate or adopt the sale at his option.
Rule and business relevance
The agent should first obtain consent and disclose all material circumstances known. Where the stated safeguards are absent, repudiation follows the specific conditions described, including dishonest concealment or disadvantage.
Limits and related provisions
Do not state that every transaction involving the agent is automatically void. Identify disclosure, consent and the statutory grounds for repudiation.
Hypothetical business example
Hypothetical example: An agent appointed to sell property buys it personally while hiding a valuable feature. The principal considers the right to repudiate or adopt on discovering the facts.
Practical decision flow
Identify whether the agent dealt on personal account in agency business.
Review prior consent and disclosure of material circumstances.
Establish dishonest concealment or disadvantage supporting repudiation.
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 whether the agent dealt on personal account in agency business.
- Review prior consent and disclosure of material circumstances.
- Establish dishonest concealment or disadvantage supporting repudiation.
Avoid
- Do not state that every transaction involving the agent is automatically void. Identify disclosure, consent and the statutory grounds for repudiation.
Glossary
- Self-dealing
- The agent dealing on personal account in the agency business.
- Repudiation
- Rejecting the transaction where the statutory conditions permit.
Frequently asked questions
Is every personal purchase automatically void?
No. The provision specifies consent, disclosure and repudiation conditions.
Does concealed material information matter?
Yes, including dishonest concealment identified in the text and illustrations.
Is disadvantage an alternative stated ground?
Yes. The section identifies it alongside dishonest material concealment.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026