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CHAPTER X AGENCY · Appointment and authority of agents

Section 188: Extent of agent’s authority

The Indian Contract Act, 1872

An agent, having an authority to do an act, has authority to do every lawful thing which is necessary in order to do such act.

An agent having an authority to carry on a business, has authority to do every lawful thing necessary for the purpose, or usually done in the course, of conducting such business.

Illustrations

(a) A is employed by B, residing in London, to recover at Bombay a debt due to B. A may adopt any legal process necessary for the purpose of recovering the debt, and may give a valid discharge for the same.

(b) A constitutes B his agent to carry on his business of a ship-builder. B may purchase timber and other materials, and hire workmen, for the purpose of carrying on the business.

Questions on this section

1 question in 4 of our papers cite Section 188. Try these from the free papers:

  1. 1. Consider the following statements under Section 188 of the Indian Contract Act, 1872: 1. An agent employed to recover a debt due to his principal may adopt any legal process necessary for the purpose and may give a valid discharge for the debt. 2. An agent appointed to carry on his principal's business of ship-building may purchase timber and hire workmen for that business. 3. An agent having authority to carry on a business may do only the acts strictly necessary for it, and not acts merely usually done in the course of such business. Which of the statements given above is/are correct?

Practise questions on Contract Law