When termination of agent's authority takes effect as to agent, and as to 206 207 Agent's duty on termination of agency by principal's death or insanity AGENT'S DUTY TO PRINCIPAL. Agent's duty in conducting principal's business Skill and diligence required from agent. Agent's accounts Agent's duty to communicate with principal Right of principal when agent deals, on his own account, in business of Agent's right of retainer out of sums received on principal's account When agent's remuneration becomes due Agent not entitled to remuneration for business misconducted Agent's lien on principal's goods and papers PRINCIPAL'S DUTY TO AGENT. Agent to be indemnified against consequences of lawful acts Agent to be indemnified against consequences of acts done in good faith Non-liability of employer of agent to do a criminal act Principal not bound when excess of agent's authority is not separable Agent cannot personally enforce, nor be bound by, contracts on behalf of principal . Consequence of inducing agent or principal to act on belief that principal or agent will be held exclusively liable 234 Liability of pretended agent Person falsely contracting as agent, not entitled to performance Liability of principal inducing belief that agent's unauthorised acts were authorised Effect, on agreement, of misrepresentation or fraud by agent. Lender not a partner by advancing money for share of profits. 239 240 241 242 Servant or agent remunerated by share of profits, not a partner Person receiving portion of profits for sale of good-will, not a partner Partner's liability to third person for neglect or fraud of co-partner Annulment of contract defining partners' rights and obligations contrary. When Court may dissolve partnership Dissolution of partnership by prohibition of business Rights and obligations of partners in partnership continued after expiry of term for which it was entered into General duties of partners 243 244 245 265 266 ib. Account, to firm, of benefit derived from transaction affecting partnership Obligations, to firm, of partner carrying on competing business Non-liability of deceased partner's estate for subsequent obligations Right of partners to apply for winding-up by Court after termination of partnership Limited liability partnerships, incorporated partnerships, and joint stock ACT No. IX OF 1872. PASSED BY THE GOVERNOR GENERAL OF (Received the assent of the Governor General on the 25th April, 1872.) The Indian Contract Act, 1872. Whereas it is expedient to define and amend certain parts Preamble. of the law relating to contracts 1; It is hereby enacted as follows: PRELIMINARY. 1. This Act may be called The Indian Contract Act, Short title. 1872.' It extends to the whole of British India; and it shall come Extent. into force on the first day of September, 1872 2. Commencement. ments repealed. The enactments mentioned in the schedule hereto are re- Enactpealed to the extent specified in the third column thereof; but nothing herein contained shall affect the provisions of any Statute 3, Act, or Regulation 5 not hereby expressly repealed, The Act is and purports to be only a partial measure, 3 Bom. 113: 10 Cal. 184. 2 i.e. as to contracts entered into, after that day. That Act IX of 1872 has no retrospective effect, see 12 Ben. 458: 5 Moo. I. A. 109, 127. For instance, 21 Geo. III. c. 70. sec. 17, and 37 Geo. III. c. 142. sec. 13, which leaves suits in the late Supreme Courts on contracts where only one of the parties shall be a Muhammadan or Gentu' to be determined by the laws and usages of the defendant' (see 5 Ben. 639, 643: 12 Suth., App. 0. J. II: but in 14 Ben. 76, 85 Couch C.J. ruled that, notwithstanding 21 Geo. III. c. 70, the Contract Act applies to Hindús in VOL. I. Calcutta): 17 & 18 Vic. c. 104. See, for instance, Acts XXXII N n 5 There seem no unrepealed Regulations which this clause would save. Inter nor any usage or custom of trade 1, nor any incident of any contract, not inconsistent with the provisions of this Act2. 2. In this Act the following words and expressions are used pretation in the following senses, unless a contrary intention appears from the context: clause 3. 'Proposal.' 'Promise.' 'Promisor' ་ misee.' 'Consider ation.' (a.)-When one person signifies to another his willingness to do or to abstain from doing anything, with a view to obtaining the assent of that other to such act or abstinence, he is said to make a proposal: (6.)-When the person to whom the proposal is made signifies his assent thereto, the proposal is said to be accepted. A proposal, when accepted, becomes a promise1: 5 (c.) The person making the proposal is called the 'promisor,' and pro- and the person accepting the proposal is called the 'promisee: ' (d.)—When, at the desire of the promisor, the promisee or any other person has done or abstained from doing, or does or abstains from doing, or promises to do or to abstain from doing, something 6, such act or abstinence or promise is called a consideration for the promise 7: 1 e.g. the customary law relating to common carriers, 10 Cal. 184, 185 (dissenting from 3 Bom. 109): the rules relating to the liens of attorneys, 6 Cal. I the rule of Hindú law (dámdupat) that arrears of interest exceeding in amount the principal debt are not recoverable at any one time, 9 Bom. H. C. 83: 1 Bom. H. C., A. C. J. 47: 3 ibid. 25: 9 ibid. 83 but see I Cal. 92. In 5 Cal. 868 Wilson J. thought the rule that 'arrears of interest more than sufficient to double the debt are not recoverable' one of limitation rather than of contract. But the custom must be reasonable: the courts therefore will not enforce a custom allowing a broker to deviate from his instructions, 8 Bom. H. C., A. C. J. 19. As to the origin and binding force of customary law, see 3 Mad. H. C. 50, per Holloway J. And as to the evidence necessary to establish a valid custom or usage, 4 Bom. H. C., A. C. J. 113: 11 Bom. 270. 2 The words not inconsistent' etc. apply to any usage or custom of trade,' as well as to any incident of any contract,' 14 Ben. 76, 84, 85. Quaere therefore whether the rule that the obligation on a bill of exchange or promissory note may be raised without consideration is still in force in India. 3 See also the General Clauses Act, supra, p. 487. According to this definition, taken with that of proposal, the scope of promises is confined to conduct on the part of the promisor. 5 4 Mad. 137 (when A granted a share in a zamíndárí to B and directed B to make an annual payment to C, and B, by a contemporaneous agreement with C, promised to carry out A's direction), 6 Mad. 354, 355. For an instance in which an expenditure was held not to be a consideration, see 3 All. 221. 6 Words are wanted to show that the consideration must be of some value. The following are suggested: and the promisee or such other person did or does thereby undertake some burden or lose some thing which in contemplation of law may be of value.' See Pollock, Contract, 167. 7 The Indian Act keeps the doubt (e.)-Every promise and every set of promises, forming the 'AgreeConsideration for each other, is an agreement: ment.' procal promises.' (f)-Promises which form the consideration or part of the 'Reci Consideration for each other, are called reciprocal promises : (9.)—An agreement not enforceable by law is said to be ‘Void void: · agreement.' 'Contract.' the Voidable the contract.' (h.)—An agreement enforceable by law is a contract : (i.)—An agreement which is enforceable by law at option of one or more of the parties thereto, but not at option of the other or others, is a voidable contract: (j.)—A contract which ceases to be enforceable by law be- 'Void comes void when it ceases to be enforceable 1. ful doctrine that a consideration executed on actual request will support a subsequent express promise, Pollock, Contract, 4th ed. 172. Better say: A contract which ceases to be enforceable by law at the suit of a party thereto becomes a void agreement when it ceases to contract.' |
