CHAPTER X AGENCY · Agent’s duty to principal

Section 216: Principal’s right to benefit gained by agent dealing on his own account in business of agency

If an agent, without the knowledge of his principal, deals in the business of the agency on his own account instead of on account of his principal, the principal is entitled to claim from the agent any benefit which may have resulted to him from the transaction.

Illustration

A directs B, his agent, to buy a certain house for him. B tells A it cannot be bought, and buys the house for himself. A may, on discovering that B has bought the house, compel him to sell it to A at the price he gave for it.

Questions on this section

1 question in 6 of our papers cite Section 216. Try these from the free papers:

1. Under Section 216 of the Indian Contract Act, 1872, if an agent, without his principal's knowledge, deals in the business of the agency on his own account instead of on the principal's account, the principal is entitled to:

Practise questions on Contract Law