Section 226 - Enforcement and consequences of agent's contracts, Section 227 - Principal how for bound, when agent exceeds authority: Indian Contract Act 1872

What is Enforcement and consequences of agent's contracts? Principal how for bound, when agent exceeds authority? Section 226 and 227 of Indian Contract Act 1872

Section 226 of Indian Contract Act 1872 : "Enforcement and consequences of agent's contracts"

226. Contracts entered into through an agent, and obligations arising from acts done by an agent, may be enforced in the same manner, and will have the same legal consequences as if the contracts had been entered into and the acts done by the principal in person.

Illustrations
(a) A buys goods from B, knowing that he is an agent for their sale, but not knowing who is the principal. B's principal is the person entitled to claim from A the price of the goods, and A cannot, in a suit by the principal, set off against that claim a debt due to himself from B.

(b) A, being B's agent, with authority to receive money on his behalf, receives from C a sum of money due to B. C is discharged of his obligation to pay the sum in question to B.

Section 227 of Indian Contract Act 1872 : "Principal how for bound, when agent exceeds authority"

227. When an agent does more than he is authorised to do, and when the part of what he does, which is within his authority, can be separated from the part which is beyond his authority, so much only of what he does as is within his authority is binding as between him and his principal.

Illustration
A, being owner of a ship and cargo, authorizes B to procure an insurance for 4,000 rupees on the ship. B procures a policy for 4,000 rupees on the ship, and another for the like sum on the cargo. A is bound to pay the premium for the policy on the ship, but not the premium for the policy on the cargo.