Chapter X - Agency
Section 235
Section 235: Compensation by a pretended agent
A person falsely claiming authority may owe compensation for induced dealing if the supposed principal does not ratify.
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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
A person untruly representing himself to be the authorized agent of another, and thereby inducing a third person to deal with him as such agent, is liable, if his alleged employer does not ratify his acts, to make compensation to the other in respect of any loss or damage which he has incurred by so dealing.
Rule and business relevance
The false representation must induce the third person to deal with the pretended agent, and the claim concerns loss or damage incurred by doing so. Non-ratification is an express condition.
Limits and related provisions
Do not assume every disputed authority issue proves a compensable claim. Establish representation, inducement, non-ratification and resulting loss.
Hypothetical business example
Hypothetical example: A person claims buying authority from a company and induces supply, but the company does not ratify. The supplier examines the loss caused by relying on the claim.
Practical decision flow
Identify the false representation of authorised agency.
Establish the induced dealing and principal’s non-ratification.
Calculate loss or damage caused by that dealing.
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 the false representation of authorised agency.
- Establish the induced dealing and principal’s non-ratification.
- Calculate loss or damage caused by that dealing.
Avoid
- Do not assume every disputed authority issue proves a compensable claim. Establish representation, inducement, non-ratification and resulting loss.
Glossary
- Pretended agent
- A person untruly representing authorised agency.
- Non-ratification
- The alleged principal’s failure to adopt the acts, as required by this rule.
Frequently asked questions
Does ratification matter?
Yes. The liability described applies if the alleged employer does not ratify.
Must the representation induce dealing?
Yes. The section makes that causal link explicit.
What is the measure described?
Loss or damage incurred by the third person through that dealing.
Need help applying this provision to your situation?
Contact BizeneedLast updated 10 October 2026