Negotiable Instruments Act Section 27 — Agency

CHAPTER III PARTIES TO NOTES, BILLS AND CHEQUES.

General

Summary

Anyone who is legally allowed to make or be bound by a contract, as described in section 26, can do so through a properly authorised agent acting in their name. However, simply giving an agent general permission to handle business and collect or pay debts does not give that agent the power to accept or sign (indorse) bills of exchange on your behalf. Also, having the authority to draw (create) a bill of exchange does not automatically mean the agent has the authority to indorse it.

Official Text

Every person capable of binding himself or of being bound, as mentioned in section 26, may so bind himself or be bound by a duly authorized agent acting in his name. A general authority to transact business and to receive and discharge debts does not confer upon an agent the power of accepting or indorsing bills of exchange so as to bind his principal. An authority to draw bills of exchange does not of itself import an authority to indorse.