Section 185 of Indian Contract Act 1872 - Consideration Not Necessary for Agency

Section 185 of the Indian Contract Act, 1872 is part of Chapter X dealing with agency. It states the rule that an agency can be created without consideration.

Meaning of Section 185

In contract law, consideration generally refers to something of value given in return for a promise. Section 185 creates a specific rule for agency: a principal does not have to provide consideration to the agent merely for the agency relationship to come into existence.

Accordingly, an authority to act for another person may be valid even when the agent receives no payment, fee or other consideration for accepting that authority. Whether the agent is entitled to remuneration in a particular arrangement is a separate question and depends on the agreement and the other applicable provisions of law.

Section 185 in the Scheme of Agency Law

Section 185 should be read with the immediately preceding provisions of Chapter X. Section 182 defines an agent and a principal. Section 183 states who may employ an agent, while Section 184 deals with who may be an agent.

The provisions following Section 185 deal with the nature and scope of an agent's authority. Under Section 186, authority may be express or implied, and Section 187 explains those two forms of authority.

Practical Effect of the Provision

The central effect of Section 185 is that absence of consideration, by itself, does not prevent creation of an agency. For example, a person may authorize a relative, friend or other person to act on his or her behalf without agreeing to pay that person merely for accepting the authority.

Important: Section 185 removes the requirement of consideration for creation of agency. It does not remove other legal requirements that may apply to a particular transaction, document or authority.

Official Text and Legal Reference

The Indian Contract Act, 1872 is Central Act No. 9 of 1872. For the current official statutory text, amendments and connected provisions, refer to the Government of India's India Code version of the Act.

Official Indian Contract Act, 1872 - India Code

Frequently Asked Questions

Is consideration required to create an agency under the Indian Contract Act?

No. Section 185 expressly provides that no consideration is necessary to create an agency.

Does an unpaid agent automatically lack legal authority?

No. The absence of payment or other consideration does not, by itself, invalidate the creation of agency. The existence and extent of authority must be considered under the applicable agency provisions and the facts of the arrangement.

Which chapter contains Section 185?

Section 185 appears in Chapter X of the Indian Contract Act, 1872, which deals with agency.

This article is intended as general legal information. For a transaction-specific issue, the governing documents, facts and current law should be examined.