Indian Contract Act, 1872 · Chapter X: Agency · Revocation of authority
Section 205: Compensation for revocation by principal, or renunciation by agent
In plain words
If there is an express or implied contract that the agency will last for a period, the principal must compensate the agent for revoking it early without sufficient cause, and the agent must compensate the principal for renouncing it early without sufficient cause.
A simplified explanation, prepared with AI assistance from the official text below and checked automatically against it for numbers and cross-references. The official text is the law and prevails over this summary. Not legal advice.
Official text
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.
Source: India Code (indiacode.gov.in), the consolidated text published by the Legislative Department, Government of India. Text as updated on India Code on 15 October 2026. Words in square brackets [ ] were inserted or substituted by later amending Acts, and *** marks words omitted by an amendment. The amendment footnotes are not reproduced here. Official text on India Code.