Chapter X - Agency
Section 227
Section 227: Separable excess of authority
Where an agent exceeds authority but the authorised part is separable, only that part binds under the stated rule.
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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 agent does more than he is authorized to do, and when the part of what he does, which is within his authority, can be separated from the part which is beyond his authority, so much only of what he does as is within his authority is binding as between him and his principal.
Illustration
A, being owner of a ship and cargo, authorizes B to procure an insurance for 4,000 rupees on the ship. B procures a policy for 4,000 rupees on the ship, and another for the like sum on the cargo. A is bound to pay the premium for the policy on the ship, but not the premium for the policy on the cargo.
Rule and business relevance
The illustration separates insurance on an authorised ship from a separate unauthorised cargo policy. The actual divisibility of the transaction matters.
Limits and related provisions
Do not assume a convenient accounting split proves legal separability. Compare section 228 where the excess cannot be separated.
Hypothetical business example
Hypothetical example: An agent arranges two separate insurance policies, only one within the authority given. The authorised policy is assessed independently from the excess.
Practical decision flow
Define the authority granted.
Identify the excess act.
Determine whether the authorised and unauthorised parts can genuinely be separated.
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
- Define the authority granted.
- Identify the excess act.
- Determine whether the authorised and unauthorised parts can genuinely be separated.
Avoid
- Do not assume a convenient accounting split proves legal separability. Compare section 228 where the excess cannot be separated.
Glossary
- Separable act
- An authorised component capable of being separated from the excess.
- Excess of authority
- Conduct beyond what the agent was authorised to do.
Frequently asked questions
Must the whole transaction always fail?
No. The section preserves the separable authorised part.
What if the excess cannot be separated?
Section 228 addresses that situation.
What evidence helps?
The instructions, contract structure and separate obligations or policies.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026