Indian Contract Act, 1872 · Chapter X: Agency · Agent’s duty to principal
Section 216: Principal's right to benefit gained by agent dealing on his own account in business of agency
In plain words
If an agent, without the principal's knowledge, deals on their own account instead of the principal's in the business of the agency, the principal can claim any benefit the agent gained from it.
Example: B, told to buy a house for A, says it cannot be bought and buys it personally. A can make B sell it to A at the price B paid.
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
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.
Illustration
A directs B, his agent, to buy a certain house for him. B tells A it cannot be bought, and buys the house for himself. A may, on discovering that B has bought the house, compel him to sell it to A at the price he gave for it.
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.