Indian Contract Act — Section 237
Liability of principal inducing belief that agent’s unauthorized acts were authorized.—
237.Liability of principal inducing belief that agent’s unauthorized acts were authorized.— When an agent has, without authority, done acts or incurred obligations to third persons on behalf of his principal, the principal is bound by such acts or obligations, if he has by his words or conduct induced such third persons to believe that such acts and obligations were within the scope of the agent’s authority.
Illustrations
(a) A consigns goods to B for sale, and gives him instructions not to sell under a fixed price. C, being ignorant of B’s
instructions, enters into a contract with B to buy the goods at a price lower than the reserved price. A is bound by the contract.
(b) A entrusts B with negotiable instruments endorsed in blank. B sells them to C in violation of private orders from A. The
sale is good.
Follow cited cases · Browse courts and years · Research topics
Judgments citing Section 237
- M/S. THE KERALA AGRO INDUSTRIES CORPORATION LTD. & ANR. v. M/S. BETA ENGINEERS
- N.Muthu (Sole Appellant died) v. Govindaswami Naidu (died)
- DELHI ELECTRIC SUPPLY UNDERTAKING v. BASANTI DEVI & Anr.
- IIFL CAPITAL SERVICES LIMITED v. SUKHADEO GORAKHA BHIL
- IIFL CAPITAL SERVICES LIMITED(Formerly IIFL Securities Limited) v. SUKHADEO GORAKHA BHIL
- CASE DETAILS v. KUWAIT AIRWAYS & Anr.
- M/S. DIL~WARI EXPORTERS v. M/S. ALITALIA CARGO$ & Ors.
- HARSHAD J. SHAH & Anr. v. L.1.C. OF INDIA & Ors.
Text reproduced from the public statutes on which the corpus is built. Verify against the official Gazette before relying on it. This is statute reference, not legal advice.