The Contract Act (Act No. IX of 1872)
- The Indian Contract Act, No. IX of 1872 (Together with an Introduction and Explanatory Notes, Table of Contents, Appendix and Index) , 1878 [Google Books]
(Communication when complete.) 4. The communication of a proposal is complete when it comes to the knowledge of the person to whom it is made. The communication of an acceptance is complete, as against the proposer, when it is put in a course of transmission to him, so as to be out of the power of die acceptor; as against the acceptor, when it comes to the knowledge of the proposer. The communication of a revocation is complete, as against the person who makes it, when it is put into a course of transmission to the person to whom it is made, so as to be out of the power of the person who makes it; as against the person to whom it is made, when it comes to his knowledge. (Revocation of proposals and acceptances.) 5. A proposal may be revoked at any time before the communication of its acceptance is complete as against the proposer, but not afterwards. An acceptance may be revoked at any time before the communication of the acceptance is complete as against the acceptor, but not afterwards. (Revocation how made.) 6. A proposal is revoked — (1) by the communication of notice of revocation by the proposer to the other party; (2) by the lapse of the time prescribed in such proposal for its acceptance, or, if no time is so prescribed, by the lapse of a reasonable time, without communication of the acceptance; (3) by the failure of the acceptor to fulfil a condition precedent to acceptance; or (4) by the death or insanity of the proposer, if the fact of his death or insanity comes to the knowledge of the acceptor before acceptance. (Acceptance mart be absolute.) 7. In order to convert a proposal into a promise, the acceptance must — (1) be absolute and unqualified; (2) be expressed in some usual and reasonable manner, unless the proposal prescribes the manner in which it is to be accepted. If the proposal prescribes a manner in which it is to be accepted, and the acceptance is not made in such manner, the proposer may, within a reasonable time after the acceptance is communicated to him, insist that his proposal shall be accepted in the prescribed manner, and not otherwise; but, if he fails to do so, he accepts the acceptance. (Acceptance by performing conditions, or receiving consideration.) 8. Performance of the conditions of a proposal, or the acceptance of any consideration for a reciprocal promise which may be offered with a proposal, is an acceptance of the proposal. (Promises, express and implied.) 9. In so far as the proposal or acceptance of any promise is made in words, the promise is said to be express. In so far as such proposal or acceptance is made otherwise than in words, the promise is said to be implied. (“ Free consent ” defined.) 14. Consent is said to be free when it is not caused by — (1) coercion, as defined in section fifteen, or (2) undue influence, as defined in section sixteen, or (3) fraud, as defined in section seventeen, or (4) misrepresentation, as defined in section eighteen, or (5) mistake, subject to the provisions of sections twenty, twenty-one and twenty-two. Consent is said to be so caused when it would not have been given but for the existence of such coercion, undue influence, fraud, misrepresentation or mistake. (“Coercion” defined.) 15. “ Coercion” is the committing, or threatening to commit, any act forbidden by the Indian Penal Code, or the unlawful detaining, or threatening to detain, any property, to the prejudice of any person whatever, with the intention of causing any person to enter into an agreement. Explanation. — It is immaterial whether the Indian Penal Code is or is not in force in the place where the coercion is employed. (“ Undue influence” defined.) 16. Undue influence is said to be employed in the following cases: — (1.) When a person in whom confidence is reposed by another, or who holds a real or apparent authority over that other, makes use of such confidence or authority for the purpose of obtaining an advantage over that other, which, but for such confidence or authority, he could not have obtained: (2.) When a person whose mind is enfeebled by old age, illness, or mental or bodily distress, is so treated as to make him consent to that, to which, but for such treatment, he would not have consented, although such treatment may not amount to coercion. (“Fraud” defined.) 17. “Fraud” means and includes any of the following acts committed by a party to a contract, or with his connivance, or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract: — (1.) — The suggestion, as a fact, of that which is not true, by one who does not believe it to be true; (2.) — The active concealment of a fact by one having knowledge or belief of the fact; (3.) — A promise made without any intention of performing it; (4.) — Any other act fitted to deceive; (5.) — Any such act or omission as the law specially declares to be fraudulent. Explanation. — Mere silence as to facts likely to affect the willingness of a person to enter into a contract is not fraud, unless the circumstances of the case are such that, regard being had to them, it is the duty of the person keeping silence to speak, or unless his silence is, in itself, equivalent to speech. (Voidability of agreements without free consent.) 19. When consent to an agreement is caused by coercion, undue influence, fraud or misrepresentation, the agreement is a contract voidable at the option of the party whose consent was so caused. A party to a contract, whose consent was caused by fraud or misrepresentation, may, if he thinks fit, insist that the contract shall be performed, and that be shall be put in the position in which he would have been if the representations made had been true. Exception. — If such consent was caused by misrepresentation or by silence, fraudulent within the meaning of section seventeen, the contract, nevertheless, is not voidable, if the party whose consent was so caused, had the means of discovering the truth with ordinary diligence. Explanation. — A fraud or misrepresentation which did not cause the consent to a contract of the party on whom such fraud was practised, or to whom such misrepresentation was made, does not render a contract voidable. (Agreement void where both parties are under mistake as to matter of fact.) 20. Where both the parties to an agreement are under a mistake as to a matter of fact essential to the agreement, the agreement is void. Explanation. — An erroneous opinion as to the value of the thing which forms the subject-matter of the agreement, is not to be deemed a mistake as to a matter of fact. (Effect of mistakes as to law.) 21. A contract is not voidable because it was caused by a mistake as to any law in force in British India; but a mistake as to a law not in force in British India has the same effect as a mistake of fact. (Contract not voidable merely because of mistake of one party as to matter of fact.) 22. A contract is not voidable merely because it was caused by one of the parties to it being under a mistake as to a matter of fact. (What considerations & objects are lawful and whatnot.) 23. The consideration or object of an agreement is lawful, unless — it is forbidden by law; or is of such a nature that, if permitted, it would defeat the provisions of any law; or is fraudulent; or involves or implies injury to the person or property of another; or the Court regards it as immoral or opposed to public policy. In each of these cases, the consideration or object of an agreement is said to be unlawful. Every agreement of which the object or consideration is unlawful, is void. Void Agreements. (Agreements void if considerations and objects unlawful in part.) 24. If any part of a single consideration for one or more objects, or any one or any part of any one of several considerations for a single object, is unlawful, the agreement is void. (Agreement in restraint of marriage, void.) 26. Every agreement in restraint of the marriage of any person, other than a minor, is void. (Agreement in restraint of trade, void.) 27. Every agreement by which any one is restrained from exercising a lawful profession, trade or business of any kind, is to that extent void. (Saving of Agreement not to carry on business of which good-will is sold;) Exception 1. — One who sells the good-will of a business may agree with the buyer to refrain from carrying on a similar business, within specified local limits, so long as the buyer, or any person deriving title to the good-will from him, carries on a like business therein, provided that such limits appear to the Court reasonable, regard being had to the nature of the business. (of agreement between partners prior to dissolution;) Exception 2. — Partners may, upon or in anticipation of a dissolution of the partnership, agree that some or all of them will not carry on a business similar to that of the partnership within such local limits as are referred to in the last preceding exception. (or during continuance of partnership.) Exception 3. — Partners may agree that some one or all of them will not carry on any business, other than that of the partnership, during the continuance of the partnership. (Agreements in restraint of legal proceedings, void.) 28. Every agreement, by which any party thereto is restricted absolutely from enforcing his rights under or in respect of any contract, by the usual legal proceedings in the ordinary tribunals, or which limits the time within which he may thus enforce his rights, is void to that extent. (Saving of contract to refer to arbitration dispute that may arise.) Exception 1. — This section shall not render illegal a contract, by which two or more persons agree that any dispute which may arise between them in respect of any subject or class of subjects, shall be referred to arbitration, and that only the amount awarded in such arbitration shall be recoverable in respect of the dispute so referred(l). (Suits barred by such contracts.) When such a contract has been made, a suit may be brought for its specific performance; and if a suit, other than for such specific performance, or for the recovery of the amount so awarded, is brought by one party to such contract against any other such party, in respect of any subject which they have so agreed to refer, the existence of such contract shall be a bar to the suit. (Saving of contract to refer questions that have already arisen.) Exception 2. — Nor shall this section render illegal any contract in writing, by which two or more persons agree to refer to arbitration any question between them which has already arisen, or affect any provision of any law in force for the time being as to references to arbitration. (Agreements by of wager, void.) 30. Agreements by way of wager are void; and no suit shall be brought for recovering anything alleged to be won on any wager, or entrusted to any person to abide the result of any game or other uncertain event on which any wager is made. (Exception in favour of certain prises for horse-racing.) This section shall not be deemed to render unlawful a subscription or contribution, or agreement to subscribe or contribute, made or entered into for or toward any plate, prize or sum of money, of the value or amount of five hundred rupees or upwards, to be awarded to the winner or winners of any horse-race. (Section 294A of the Indian Penal Code not affected.) Nothing in this section shall be deemed to legalize any transaction connected with horse-racing, to which the provisions of Section 294A of the Indian Penal Code apply. (Effect of refusal to accept Offer of performance.) 38. Where a promisor has made an offer of performance to the promisee and the offer has not been accepted, the promisor is not responsible for non-performance, nor does lie thereby lose his rights under the contract. Every such offer must fulfil the following conditions: — (1). It must be unconditional: (2). It must be made at a proper time and place, and under such circumstances that the person to whom it is made may have a reasonable opportunity of ascertaining that the person by whom it is made is able and willing there and then to do the whole of what he is bound by his promise to do: (3). If the offer is an offer to deliver anything to the promisee, the promisee must have a reasonable opportunity of seeing that the thing offered is the thing which the promisor is bound by his promise to deliver. An offer to one of several joint promisees has the same legal consequences as an offer to all of them. (Effect of accepting performance from third person.) 41. When a promisee accepts performance of the promise from a third person, he cannot afterwards enforce it against the promisor. Performance of Reciprocal Promises. (Promisor not bound to perform, unless reciprocal promisee ready and willing to perform.) 51. When a contract consists of reciprocal promises to be simultaneously performed, no promisor need perform his promise unless the promisee is ready and willing to perform his reciprocal promise. (Order of performance of reciprocal promises.) 52. Where the order in which reciprocal promises are to be performed is expressly fixed by the contract, they shall be performed in that order; and where the order is not expressly fixed by the contract, they shall be performed in that order which the nature of the transaction requires. (Liability of party preventing event on which contract is to take effect.) 53. When a contract contains reciprocal promises, and one party to the contract prevents the other from performing his promise, the contract becomes voidable fit the option of the party so prevented; and he is entitled to compensation from the other party for any loss which he may sustain in consequence of the non-performance of the contract. (Effect of default as to that promise which should be first performed, in contract consisting of reciprocal promises.) 54. When a contract consists of reciprocal promises, such that one of them cannot be performed, or that its performance cannot be claimed, till the other has been performed, and the promisor of the promise last mentioned fails to perform it, such promisor cannot claim the performance of the reciprocal promise, and must make compensation to the other party to the contract for any loss which such other party may sustain by the non-performance of the contract. (Effect of failure to perform at fixed time, in contract in which time is essential.) 55. When a party to a contract promises to do a certain thing at or before a specified time, or certain things at or before specified times, and fails to do any such thing at or before the specified time, the contract, or so much of it as has not been performed, becomes voidable at the option of the promisee, if the intention of the parties was that time should be of the essence of the contract. (Effect of such failure when time is not essential.) If it was not the intention of the parties that time should be of the essence of the contract, the contract does not become voidable by the failure to do such thing at or before the specified time; but the promisee is entitled to compensation from the promisor for any loss occasioned to him by such failure. (Effect of acceptance of performance at time other than that agreed upon.) If, in case of a contract voidable on account of the promisor’s failure to perform his promise at the time agreed, the promisee accepts performance of such promise at any time other than that agreed, the promisee cannot claim compensation for any loss occasioned by the non-performance of the promise at the time agreed, unless, at the time of such acceptance, he gives notice to the promisor of his intention to do so. Appropriation of Payments. (Application of payment where debt to be discharged is indicated.) 59. Where a debtor, owing several distinct debts to one person, makes a payment to him, either with express intimation, or under circumstances implying, that the payment is to be applied to the discharge of some particular debt, the payment, if accepted, must be applied accordingly. (Application of payment where debt to be discharged is not indicated.) 60. Where the debtor has omitted to intimate, and there are no other circumstances indicating, to which debt the payment is to be applied, the creditor may apply it at his discretion to any lawful debt actually due and payable to him from the debtor, whether its recovery is or is not barred by the law in force for the time being as to the limitation of suits. (Application of payment where neither party makes appropriation.) 61. Where neither party makes any appropriation, the payment shall be applied in discharge of the debts in order of time, whether they are or are not barred by the law in force for the time being as to the limitation of suits. If the debts are of equal standing, the payment shall be applied in discharge of each proportionably. CONTRACTS WHICH NEED NOT BE PERFORMED. (Contracts changed, rescinded or altered need not be performed.) 62. If the parties to a contract agree to substitute a new contract for it, or to rescind or alter it, the original contract need not be performed. (Obligation of person enjoying benefit of non-gratuitous act.) 70. Where a person lawfully does anything for another person, or delivers anything to him, not intending to do so gratuitously, and such other person enjoys the benefit thereof, the latter is bound to make compensation to the former in respect of, or to restore, the thing so done or delivered. (Title to compensation for breach of contract in which a sum is named as payable in case of breach.) 74. When a contract has been broken, if a sum is named in the contract as the amount to be paid in case of such breach, the party complaining of the breach is entitled, whether or not actual damage or loss is proved to have been caused thereby, to receive from the party who has broken the contract reasonable compensation not exceeding the amount so named. Exception. — When any person enters into any bail-bond, recognizance or other instrument of the same nature, or, under the provisions of any law, or under the orders of the Government of India or of any Local Government, gives any bond for the performance of any public duty or act in which the public are interested, he shall be liable, upon breach of the condition of any such instrument, to pay the whole sum mentioned therein. Explanation. — A person who enters into a contract with Government does not necessarily thereby undertake any public duty, or promise to do an act in which the public are interested. (Contract of ‘ guarantee,’ ‘ surety,’ ‘ principal debtor,’ and ‘ creditor.') 126. A ‘ contract of guarantee’ is a contract to perform the promise, or discharge the liability, of a third person in case of his default. The person who gives the guarantee is called the ‘ surety;’ the person in respect of whose default the guarantee is given is called the ‘ principal debtor,’ and the person to whom the guarantee is given is called the ‘creditor’. A guarantee maybe either oral or written. (Surety’s liability,) 128. The liability of the surety is co-extensive with that of the principal debtor, unless it is otherwise provided by the contract. (Discharge of surety when creditor compounds with, gives time to, or agrees not to sue, principal debtor.) 135. A contract between the creditor and the principal debtor, by which the creditor makes a composition with, or promises to give time to, or not to sue, the principal debtor, discharges the surety, unless the surety assents to such contract. (Surety not discharged when agreement made with third person to give time to principal debtor.) 136. Where a contract to give time to the principal debtor is made by the creditor with a third person, and not with the principal debtor, the surety is not discharged. (Release of one co-surety does not discharge others.) 138. Where there are co-sureties, a release by the creditor of one of them does not discharge the others; neither does it free the surety so released from his responsibility to the other sureties. (Implied promise to indemnify surety.) 145. In every contract of guarantee there is an implied promise by the principal debtor to indemnify the surety; and the surety is entitled to recover from the principal debtor whatever sum he has rightfully paid under the guarantee, but no sums which he has paid wrongfully. (Co-sureties liable to contribute equally.) 146. Where two or more persons are co-sureties for the same debt or duty, either jointly or severally, and whether under the same or different contracts, and whether with or without the knowledge of each other, the co-sureties, in the absence of any contract to the contrary, are liable, as between themselves, to pay each an equal share of the whole debt, or of that part of it which remains unpaid by the principal debtor. (Liability of co-sureties bound in different sums.) 147. Co-sureties who are bound in different sums are liable to pay equally as far as the limits of their respective obligations permit. CHAPTER IX. OF BAILMENT. (‘Bailment,’ ‘bailor,’ and ‘bailee’ defined) 148. A ‘bailment’ is the delivery of goods by one person to another for some purpose, upon a contract that they shall, when the purpose is accomplished, be returned or otherwise disposed of according to the directions of the person delivering them. The person delivering the goods is called the ‘ bailor.’ The person to whom they are delivered is called the ‘bailee’. Explanation. — If a person already in possession of the goods of another contracts to hold them as a bailee, he thereby becomes the bailee, and the owner becomes the bailor of such goods, although they may not have been delivered by way of bailment. (Delivery to bailee how made.) 149. The delivery to the bailee may be made by doing anything which has the effect of putting the goods in the possession of the intended bailee or of any person authorized to hold them on his behalf. (Bailor's duty to disclose faults in goods bailed.) 150. The bailor is bound to disclose to the bailee faults in the goods bailed, of which the bailor is aware, and which materially interfere with the use of them, or expose the bailee to extraordinary risks; and if he does not make such disclosure, he is responsible for damage arising to the bailee directly from such faults. If the goods are bailed for hire, the bailor is responsible for such damage, whether he was or was not aware of the existence of such faults in the goods bailed. (Care to be taken by bailee.) 151. In all cases of bailment the bailee is bound to take as much care of the goods bailed to him as a man of ordinary prudence would, under similar circumstances, take of his own goods of the same bulk, quality and value as the goods bailed. (Termination of bailment by bailee’s act inconsistent with conditions.) 153. A contract of bailment is voidable at the option of the bailor, if the bailee does any act with regard to the goods bailed, inconsistent with the conditions of the bailment. (Liability of bailee making unauthorized use of goods bailed.) 154. If the bailee makes any use of the goods bailed which is not according to the conditions of the bailment, he is liable to make compensation to the bailor for any damage arising to the goods from or during such use of them. (Repayment by bailor of necessary expenses.) 158. Where, by the conditions of the bailment, the goods are to be kept or to be carried, or to have work done upon them by the bailee for the bailor, and the bailee is to receive no remuneration, the bailor shall repay to the bailee the necessary expenses incurred by him for the purpose of the bailment. (Return of goods bailed, on expiration of time or accomplishment of purpose.) 160. It is the duty of the bailee to return, or deliver according to the bailor’s directions, the goods bailed, without demand, as soon as the time for which they were bailed has expired, or the purpose for which they were bailed has been accomplished. (Bailee’s responsibility when goods are not duly delivered or tendered.) 161. If, by the fault of the bailee, the goods are not returned, delivered or tendered at the proper time, he is responsible to the bailor for any loss, destruction or deterioration of the goods from that time. (Bailor entitled to increase or profit from goods bailed.) 163. In the absence of any contract to the contrary, the bailee is bound to deliver to the bailor, or according to his directions, any increase or profit which may have accrued from the goods bailed. (Right of third person claiming goods bailed.) 167. If a person, other than the bailor, claims goods bailed, he may apply to the Court to stop the delivery of the goods to the bailor, and to decide the title to the goods. CHAPTER X. AGENCY. Appointment and Authority of Agents. (‘ Agent’ and ‘ principal’ defined.) 182. An ‘agent’ is a person employed to do any act for another, or to represent another in dealings with third persons. The person for whom such act is done, or who is so represented, is called the ‘ principal.’ (Who may be an agent.) 184. As between the principal and third persons, any person may become an agent; but no person who is not of the age of majority and of sound mind can become an agent, so as to be responsible to his principal according to the provisions in that behalf herein contained. (Agent’s authority may be expressed or implied.) 186. The authority of an agent may be expressed or implied. (Definitions of express and implied authority.) 187. An authority is said to be express when it is given by words spoken or written. An authority is said to be implied when it is to be inferred from the circumstances of the case; and things spoken or written, or the ordinary course of dealing, may be accounted circumstances of the case. (Extent of agent’s authority.) 188. An agent, having an authority to do an act, has authority to do every lawful thing which is necessary in order to do such act. An agent having an authority to carry on a business, has authority to do every lawful thing necessary for the purpose, or usually done in the course, of conducting such business. (Agent’s authority in an emergency.) 189. An agent has authority, in an emergency, to do all such acts for the purpose of protecting his principal from loss as would be done by a person of ordinary prudence, in his own case, under similar circumstances. Sub-Agents. (When agent cannot delegate.) 190. An agent cannot lawfully employ another to perform acts which he has expressly or impliedly undertaken to perform personally, unless by the ordinary custom of trade a sub-agent may, or, from the nature of the agency, a sub-agent must, be employed. (Representation of principal by sub-agent properly appointed.) 192. Where a sub-agent is properly appointed, the principal is, so far as regards third persons, represented by the sub-agent, and is bound by and responsible for his acts, as if he were an agent originally appointed by the principal. (Agent’s responsibility for sub-agent.) The agent is responsible to the principal for the acts of the sub-agent. (Sub-agent's responsibility.) The sub-agent is responsible for his acts to the agent, but not to the principal, except in cases of fraud or wilful wrong. (Agent’s responsibility for sub-agent appointed without authority.) 193. Where an agent, without having authority to do so, has appointed a person to act as a sub-agent, the agent stands towards such person in the relation of a principal to an agent, and is responsible for his acts both to the principal and to third persons; the principal is not represented by or responsible for the acts of the person so employed, nor is that person responsible to the principal. (Relation between principal and person duly appointed by agent to act in business of agency.) 194. Where an agent, holding an express or implied authority to name another person to act for the principal in the business of the agency, has named another person accordingly, such person is not a sub-agent, but an agent of the principal for such part of the business of the agency as is entrusted to him. Ratification. (Effect of ratification.) 196. Where acts are done by one person on behalf of another, but without his knowledge or authority, be may elect to ratify or to disown such acts. If he ratify them, the same effects will follow as if they had been performed by his authority. (Ratification may be expressed or implied.) 197. Ratification may be expressed or may be implied in the conduct of the person on whose behalf the acts are done. (Knowledge requisite to valid ratification.) 198. No valid ratification can be made by a person whose knowledge of the facts of the case is materially defective. (Effect of ratifying unauthorized act forming part of a transaction.) 199. A person ratifying any unauthorized act done on his behalf, ratifies the whole of the transaction of which such act formed a part. (Ratification of unauthorized act cannot injure third person.) 200. An act done by one person on behalf of another, without such other person’s authority, which, if done with authority, would have the effect of subjecting a third person to damages, or of terminating any right or interest of a third person, cannot, by ratification, be made to have such effect. Revocation of Authority. (Termination of agency.) 201. An agency is terminated by the principal revoking his authority; or by the agent renouncing the business of the agency; or by the business of the agency being completed; or by either the principal or agent dying or becoming of unsound mind; or by the principal being adjudicated an insolvent under the provisions of any Act for the time being in force for the relief of insolvent debtors. (Termination of agency, where agent has an interest in subject-matter.) 202. Where the agent has himself an interest in the property which forms the subject-matter of the agency, the agency cannot, in the absence of an express contract, be terminated to the prejudice of such interest. (When principal may revoke agent's authority.) 203. The principal may, save as is otherwise provided by the last preceding section, revoke the authority given to his agent at any time before the authority has been exercised so as to bind the principal. (Revocation where authority has been partly exercised.) 204. The principal cannot revoke the authority given to his agent after the authority has been partly exercised, so far as regards such acts and obligations as arise from acts already done in the agency. (Compensation for revocation by principal, or renunciation by agent.) 205. Where there is an express or implied contract that the agency should be continued for any period of time, the principal must make compensation to the agent, or the agent to the principal, as the case may be, for any previous revocation or renunciation of the agency without sufficient cause. (Notice of revocation or renunciation.) 206. Reasonable notice must be given of such revocation or renunciation, otherwise the damage thereby resulting to the principal or the agent, as the case may be, must be made good to the one by the other. (Revocation and renunciation may be expressed or implied.) 207. Revocation and renunciation may be expressed or may be implied in the conduct of the principal or agent respectively. (When termination of agent's authority takes effect as to agent, and as to third persons.) 208. 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. (Agent’s duty on termination of agency by principal's death or insanity.) 209. When an agency is terminated by the principal dying or becoming of unsound mind, the agent is bound to take, on behalf of the representatives of his late principal, all reasonable steps for the protection and preservation of the interests entrusted to him. Agent’s Duty to Principal. (Agent’s duty in conducting principal’s business.) 211. An agent is bound to conduct the business of his principal according to the directions given by the principal, or, in the absence of any such directions, according to the custom which prevails in doing business of the same kind at the place where the agent conducts such business. When the agent acts otherwise, if any loss be sustained, he must make it good to his principal, and if any profit accrues, he must account for it. (Skill and diligence required from agent.) 212. An agent is bound to conduct the business of the agency with as much skill as is generally possessed by persons engaged in similar business, unless the principal has notice of his want of skill. The agent is always bound to act with reasonable diligence, and to use such skill as he possesses; and to make compensation to his principal in respect of the direct consequences of his own neglect, want of skill, or misconduct, but not in respect of loss or damage which are indirectly or remotely caused by such neglect, want of skill, or misconduct. (Agent’s accounts.) 213. An agent is bound to render proper accounts to his principal on demand. (Agent’s duty to communicate with principal.) 214. It is the duty of an agent, in cases of difficulty, to use all reasonable diligence in communicating with his principal, and in seeking to obtain his instructions. (Principal's right to benefit gained by agent dealing on his own account in business of agency.) 216. If an agent, without the knowledge of his principal, deals in the business of the agency on his own account instead of on account of his principal, the principal is entitled to claim from the agent any benefit which may have resulted to him from the transaction. (Agent’s right of retainer out of sums received on principal’s account) 217. An agent may retain, out of any sums received on account of the principal in the business of the agency, all monies due to himself in respect of advances made or expenses properly incurred by him in conducting such business, and also such remuneration as may be payable to him for acting as agent. (Agent’s duty to pay sums received for principal.) 218. Subject to such deductions, the agent is bound to pay to his principal all sums received on his account. (When agent’s remuneration becomes due.) 219. In the absence of any special contract, payment for the performance of any act is not due to the agent until the completion of such act(l); but an agent may detain monies received by him on account of goods sold, although the whole of the goods consigned to him for sale may not have been sold, or although the sale may not be actually complete. Principal’s Duty to Agent. (Agent to be indemnified against consequences of lawful acts.) 222. The employer of an agent is bound to indemnify him against the consequences of all lawful acts done by such agent in exercise of the authority conferred upon him. (Liability of pretended agent.) 235. A person untruly representing himself to be the authorized agent of another, and thereby inducing a third person to deal with him as such agent, is liable, if his alleged employer does not ratify his acts, to make compensation to the other in respect of any loss or damage which he has incurred by so dealing. (Effect, on agreement, of misrepresentation or fraud by agent.) 238. Misrepresentations made, or frauds committed, by agents acting in the course of their business for their principals, have the same effect on agreements made by such agents as if such misrepresentations or frauds had been made or committed by the principals; but misrepresentations made, or frauds committed, by agents, in matters which do not fall within their authority, do not affect their principals.