Indian Contract Act, 1872 · Chapter X: Agency · Effect of agency on contracts with third persons
Section 231: Rights of parties to a contract made by agent not disclosed
In plain words
If an agent contracts with someone who neither knows nor suspects they are an agent, the principal can require performance, but the other party has the same rights against the principal as they would have had against the agent as principal.
- If the principal reveals themselves before the contract is completed, the other party can refuse to perform if they can show they would not have contracted had they known.
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.
Official text
If an agent makes a contract with a person who neither knows, nor has reason to suspect, that he is an agent, his principal may require the performance of the contract; but the other contracting party has, as against the principal, the same rights as he would have had as against the agent if the agent had been principal.
If the principal discloses himself before the contract is completed, the other contracting party may refuse to fulfil the contract, if he can show that, if he had known who was the principal in the contract, or if he had known that the agent was not a principal, he would not have entered into the contract.
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.
Supreme Court judgments citing the section 231
No Supreme Court judgment in our database cites this section yet.