Section 27 - Agency, Section 28 - Liability of agent signing : Negotiable Instruments Act 1881
What is Agency? What is Liability of agent signing? Agency Liability
of agent signing are defined under Section 27 and 28 of Negotiable
Instruments Act 1881
Section 27 of Negotiable Instruments Act 1881: "Agency"
Every person capable of binding himself or of
being bound, as mentioned in section 26, may so bind
himself or be bound by a duly authorized agent
acting in his name.
A general authority to transact business and to receive and
discharge debts does not confer upon an agent the power of
accepting or indorsing bills of exchange so as to bind his
An authority to draw bills of exchange does not of itself
import an authority to indorse.
Section 28 of Negotiable Instruments Act 1881: "Liability
of agent signing"
An agent who signs his name to a promissory note, bill of
exchange or cheque without indicating thereon that he signs as
agent, or that he does not intend thereby to incur personal
responsibility, is liable personally on the instrument, except
to those who induced him to sign upon the belief that the
principal only would be held liable.