CA FoundationIndian Contract Act 1872 - agent exceeding authority
Will Z succeed against X when agent Y exceeds his ₹10 lakh limit, and does Section 228 or 233 apply?
BrunoAI answer
Section 228 applies here, not Section 233. Z will not succeed against X. 1. Section 227: if the authorised part can be separated from the excess, the principal is bound only for the authorised part. 2. Section 228: if they cannot be separated, the principal is not bound at all. 3. Here Y bought a single item for ₹12 lakhs against a ₹10 lakh limit. One item cannot be split into ₹10 lakh plus ₹2 lakh, so X is not liable. The discount or benefit to X does not change this. 4. Z can recover from Y, who exceeded his authority. Z could also claim from X if X ratifies the purchase. Section 233 applies only where the agent is personally liable. Then the third party may sue the agent, the principal, or both. That is not the issue here.
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1 answer 12 Nov 2026
