Sections 183 to 185 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
These three short sections answer three practical questions about starting an agency. Who can appoint an agent? Who can act as one? And does the principal have to give something in return for the agent's engagement? The Act's answers are different for the principal and the agent, and the difference is worth reading closely.
A person may employ an agent only if he is of the age of majority according to the law to which he is subject, and of sound mind (s.183). As between the principal and third persons, any person may become an agent; but a person not of the age of majority and of sound mind cannot become an agent so as to be responsible to his principal under the Act's provisions (s.184). No consideration is necessary to create an agency (s.185). None of the three sections prints an illustration.
If you are appointing someone to act for you, an agreement drafting adviser can help you record the appointment properly.
Section 183: who may employ an agent
The text: "Any person who is of the age of majority according to the law to which he is subject, and who is of sound mind, may employ an agent."
There are two conditions and both must be met.
- Age of majority "according to the law to which he is subject". The section does not fix an age; it points to the law that governs the person. The Indian Majority Act and personal laws are outside this article, so check the law that applies to the person.
- Sound mind. Section 12 of the Act explains when a person is of sound mind for contracting. See our article on sections 12 and 13.
The section is phrased positively: such a person "may employ an agent". It does not by itself spell out the position of one who fails the conditions; this article does not go beyond the text.
Section 184: who may be an agent
The text: "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."
The sentence has two halves, and the words "as between the principal and third persons" govern the first half.
| Relationship | What section 184 says |
|---|---|
| Principal and third persons | Any person may become an agent |
| Principal and agent (responsibility of the agent to the principal under the Act) | A person who is not of the age of majority and of sound mind cannot become an agent so as to be responsible to the principal |
So the Act separates two questions. Can a person act so as to bind the principal in dealings with outsiders? Yes, "any person". Can the person be held responsible to the principal for the duties the Act lays on an agent (accounts, skill, and so on)? Only if of the age of majority and of sound mind. The section's wording is "not of the age of majority and of sound mind", and we quote it as printed; the sense is that a person lacking either requirement cannot be made responsible to the principal under those provisions.
The practical result is that a principal who appoints someone who does not meet the conditions may still be bound in dealings with outsiders, but may not be able to hold that person to the duties of an agent under the Act. The text states the rule; consequences have been worked out in case law, which is outside this article.
If you are choosing representatives for your business, a short written appointment that records the person's age and capacity is sensible.
Section 185: no consideration needed
"No consideration is necessary to create an agency."
Section 2(d) defines consideration, and section 10 lists it among the elements of a valid contract (see our article on section 2(d) consideration). Section 185 is a specific carve-out for agency: the employment itself needs no consideration. This does not mean the agent works without charge. The principal's duty to pay remuneration, where agreed, is dealt with later in the chapter. Section 185 only says that the creation of the agency does not depend on consideration passing.
A modern example (ours, not the Act's)
Latha is a seventeen-year-old who helps her uncle Imran, a spice trader in Kochi, by taking delivery orders from shopkeepers on his behalf. Imran, an adult of sound mind, has employed her under section 183 (he meets both conditions). Under section 184, as between Imran and the shopkeepers, Latha may become his agent. But because she is not of the age of majority, she cannot be an agent so as to be responsible to Imran under the Act's agency provisions. Imran cannot treat her as answerable to him in the way an adult agent would be. He also does not need to pay her anything for the agency to exist, because of section 185, though he may choose to give her something.
In another case, a company director aged 40 and of sound mind appoints a friend to collect a debt for him as a favour, with no payment. The agency exists without consideration.
What can the parties change?
The sections do not mention contrary agreement. Age and soundness of mind are conditions set by law. The parties do have latitude on payment: section 185 means an agency can exist with no consideration, and a contract can still provide for remuneration if the parties want it.
Practical points
- Principals: confirm you meet both conditions in section 183 before appointing.
- Appointing minors: know that, on the printed words of section 184, the person cannot become an agent so as to be responsible to you under the Act.
- No need for a fee to create the agency: but record any fee or commission you have agreed, since it is a separate matter.
- Keep a written appointment letter: it shows who employed whom and for what.
Need help appointing an agent or representative?
If you are about to appoint a sales representative, a broker or a collection agent, or you want to check that an existing appointment letter covers capacity and scope, our agreement drafting service can help you put it in writing. Other laws may also apply to the kind of agent you appoint.
Key takeaways
- To employ an agent a person must be of the age of majority according to the law to which he is subject, and of sound mind (s.183).
- As between the principal and third persons, any person may become an agent (s.184).
- A person who is not of the age of majority and of sound mind cannot become an agent so as to be responsible to his principal under the Act (s.184).
- No consideration is necessary to create an agency (s.185).
Read next
- Section 182: agent and principal defined
- Section 186: agent's authority may be expressed or implied
- Section 187: express and implied authority defined
- Agency: sections 182 to 238
Disclaimer: Based on the text of the Indian Contract Act, 1872 as consulted on 1 October 2026. Many questions under this Act turn on case law and on the wording of the particular contract, which this article does not cover. It is general information, not legal advice; check the official text and take advice before acting.