Chapter X - Agency
Section 233
Section 233: Claims where the agent is personally liable
Where an agent is personally liable, the counterparty may hold the agent, principal or both liable.
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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
In cases where the agent is personally liable, a person dealing with him may hold either him or his principal, or both of them, liable.
Illustration
A enters into a contract with B to sell him 100 bales of cotton, and afterwards discovers that B was acting as agent for C. A may sue either B or C, or both, for the price of the cotton.
Rule and business relevance
Personal liability of the agent is the threshold condition. This provision does not itself make every representative personally liable.
Limits and related provisions
Check section 230 and the contract first, and section 234 where the counterparty induced reliance on exclusive liability. Do not suggest double recovery for one obligation.
Hypothetical business example
Hypothetical example: A contract makes the agent personally liable alongside the principal’s position. The creditor considers proceedings against either or both, subject to the actual obligations.
Practical decision flow
Establish the agent’s personal liability.
Identify the principal’s corresponding obligation.
Review any exclusive-liability representation and avoid duplicate recovery.
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
- Establish the agent’s personal liability.
- Identify the principal’s corresponding obligation.
- Review any exclusive-liability representation and avoid duplicate recovery.
Avoid
- Check section 230 and the contract first, and section 234 where the counterparty induced reliance on exclusive liability. Do not suggest double recovery for one obligation.
Glossary
- Personal-liability threshold
- The condition that the agent is personally liable.
- Either or both
- The choices stated for the counterparty once that condition exists.
Frequently asked questions
Does this make all agents personally liable?
No. It applies in cases where personal liability already exists.
May both be proceeded against?
The provision expressly allows either or both to be held liable.
Can later exclusive-liability conduct matter?
Yes. Section 234 sets out that restriction.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026