Indian Contract Act,1872

Act No : 9

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Section : Agent to be indemnified against consequences of lawful acts

222.Agent to be indemnified against consequences of lawful acts.-The employer of an agent is bound to indemnify him against theconsequences of all lawful acts done by such agent in exercise of theauthority Conferred upon him. Illustrations (a)B, at Singapur, under instructions from A of Calcutta,contracts with C to deliver certain goods to him. A does not send thegoods to B, and C sues B for breach of contract. B informs A of thesuit, and A authorizes him to defend the suit. B defends the suit,and is compelled to pay damages and costs, and incurs expenses. A isliable to B for such damages, costs and expenses. (b)B, a broker at Calcutta, by the orders of A, a merchant there,contracts with C for the purchase of 10 casks of oil for A. AfterwardsA refuses to receive the oil, and C sues B. B informs A, whorepudiates the contract altogether. B defends, but unsuccessfully,and has to pay damages and costs and incurs expenses. A is liable toB for such damages, costs and expenses.

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