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Indian Contract Act, 1872 · Chapter X: Agency · Revocation of authority

Section 202: Termination of agency, where agent has an interest in subject-matter

In plain words

Where the agent has their own interest in the property that is the subject of the agency, the agency cannot, without an express contract, be ended to the prejudice of that interest.

Example: A authorises B to sell A's land and repay B's own loans from the price. A cannot revoke this, and it does not end on A's insanity or death.

A simplified explanation, prepared with AI assistance from the official text below and checked automatically against it for numbers and cross-references. The official text is the law and prevails over this summary. Not legal advice.

Read the in-depth explanation, with key Supreme Court rulings ↓

Official text

Where the agent has himself an interest in the property which forms the subject-matter of the agency, the agency cannot, in the absence of an express contract, be terminated to the prejudice of such interest.

Illustrations

(a) A gives authority to B to sell A's land, and to pay himself, out of the proceeds, the debts due to him from A. A cannot revoke this authority, nor can it be terminated by his insanity or death.

(b) A consigns 1,000 bales of cotton to B, who has made advances to him on such cotton, and desires B to sell the cotton, and to repay himself out of the price, the amount of his own advances. A cannot revoke this authority, nor is it terminated by his insanity or death.

Source: India Code (indiacode.gov.in), the consolidated text published by the Legislative Department, Government of India. Text as updated on India Code on 15 October 2026. Words in square brackets [ ] were inserted or substituted by later amending Acts, and *** marks words omitted by an amendment. The amendment footnotes are not reproduced here. Official text on India Code.

Understanding this section

Section 202 makes an agency irrevocable where the agent himself has an interest in the property that is the subject matter of the agency. Unless the contract expressly provides otherwise, it cannot be terminated to the prejudice of that interest, even by the principal's death or insanity.

Agency coupled with interest

The interest must exist when the agency is created and must be in the subject matter itself, such as authority to sell land and repay oneself a debt from the proceeds. Mere remuneration or commission is not such an interest.

Powers of attorney

A power of attorney given to secure a lender's dues, or to a purchaser who has paid, may be an agency coupled with interest. A bare power of attorney is revocable.

Common mistakes

  • Treating a right to commission as an interest that makes the agency irrevocable.

Read with: Section 201 Indian Contract Act, 1872, Section 203 Indian Contract Act, 1872

Prepared with AI assistance as a study aid. Every ruling listed was checked against the Supreme Court's own judgments on this site, and quoted words appear in those judgments; linked names open the full judgment. Read the judgments themselves before relying on them. Not legal advice.

Supreme Court judgments citing the section 202