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Section 226, Contract Act 1872: Enforcement & Consequences Of Agent's Contracts

Section 226 under the Chapter X (Agency - Appointment and authority of agents) of the Contract Act, 1872 of India - 'Enforcement and consequences of agent's contracts', is reproduced hereunder:—

“Contracts entered into through an agent, and obligations arising from acts done by an agent, may be enforced in the same manner, and will have the same legal consequences, as if the contracts had been entered into and the acts done by the principal in person.


(a) A buys goods from B, knowing that he is an agent for their sale, but not knowing who is the principal. B's principal is the person entitled to claim from A the price of the goods, and A cannot, in a suit by the principal, set-off against that claim a debt due to himself from B.

(b) A, being B's agent; with authority to receive money on his behalf, receives from C, a sum of money due to B. C is discharged of his obligation to pay the sum in question to B.”

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