Indian Contract Act Section 195 — Agent’s duty in naming such person

Summary

When an agent chooses another agent to act for the principal, the agent must use the same level of care and judgment that a reasonably careful person would use when choosing someone for their own affairs. If the agent does this, the agent is not liable to the principal for anything the chosen agent does or fails to do.

Official Text

In selecting such agent for his principal, an agent is bound to exercise the same amount of discretion as a man of ordinary prudence would exercise in his own case; and, if he does this, he is not responsible to the principal for the acts or negligence of the agent so selected. Illustrations

Related Judgments

• Sanjay Vaghji Rathod vs Government of India & Ors — Bombay High Court (Mumbai Principal Seat) (2022)
• THE PR. COMMISSIONER OF INCOME; TAX-9 vs UNISION HOTELS LTD — Delhi High Court (2024)
• ENGINEERING ANALYSIS CENTRE OF EXCELLENCE PRIVATE LIMITED vs THE COMMISSIONER OF INCOME TAX & ANR — Supreme Court of India (2021)
• GE INDIA TECHNOLOGY CENTRE PRIVATE LTD. vs COMMISSIONER OF INCOME TAX & ANR — Supreme Court of India (2010)