Indian Contract Act,1872
Act No : 9
Section : When termination of agent's authority takes effect as toagent, and as to third persons
208.When termination of agent's authority takes effect as to agent, and as to third persons.-The termination of the authority of an agent does not, so far as regards the agent, take effect before it becomes known to him, or, so far as regards third persons, before it becomes known to them. Illustrations (a) A directs B to sell goods for him, and agrees to give B five per cent. commission on the price fetched by the goods. A afterwards,by letter, revoke B's authority . B, after the letter is sent, but before he receives it, sells the goods for 100 rupees. The sale is binding on A, and B is entitled to five rupees as his commission. (b) A, at Madras, by letter, directs B to sell for him somecotton lying in a warehouse in Bombay, and afterwards, by letter,revokes his authority to sell, and directs B to send the cotton toMadras. B, after receiving the second letter, enters into a contractwith C, who knows of the first letter, but not of the second, for thesale to him of the cotton. C pays B the money, with which B absconds.C's payment is good as against A. (c) A directs B, his agent, to pay certain money to C. A dies,and D takes out probate to his will. B, after A's death, but beforehearing of it, pays the money to C. The payment is good as against D,the executor.
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