Sections 207 to 210 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.
Ending an agency has two timing questions. How is revocation shown, and when does it bite? Section 207 says revocation and renunciation may be express or implied. Section 208 says termination does not take effect against the agent before it becomes known to him, or against third persons before it becomes known to them. Sections 209 and 210 deal with the agent's duty after the principal's death or unsound mind and with the sub-agents.
Revocation and renunciation may be expressed or implied in conduct (s.207). Termination of authority does not take effect so far as regards the agent before it becomes known to him, or so far as regards third persons before it becomes known to them (s.208). Where the agency ends by the principal's death or unsound mind, the agent must take all reasonable steps for the protection and preservation of the interests entrusted to him on behalf of the principal's representatives (s.209). Termination of the agent's authority terminates the authority of all sub-agents he appointed, subject to the rules on termination (s.210).
Section 207: revocation and renunciation may be implied
"Revocation and renunciation may be expressed or may be implied in the conduct of the principal or agent respectively."
The Act's illustration. A empowers B to let A's house. Afterwards A lets it himself. This is an implied revocation of B's authority.
Nothing was said to B, yet A's own act of letting the house shows that the authority is withdrawn. Section 201, covered in our article on termination of agency, lists revocation among the modes of termination. The principle echoes sections 187 and 197, where authority and ratification can also be implied from conduct.
Section 208: termination takes effect on knowledge
"The termination of the authority of an agent does not, so far as regards the agent, take effect before it becomes known to him, or, so far as regards third persons, before it becomes known to them."
The section splits the question into two: the agent and third persons. Each is protected until the termination becomes known to that person.
| Person | When termination takes effect as to that person |
|---|---|
| The agent | Not before it becomes known to him |
| Third persons | Not before it becomes known to them |
The Act's illustrations.
(a) A directs B to sell goods for him, and agrees to give B five per cent. commission on the price fetched by the goods. A afterwards, by letter, revokes B's authority. B, after the letter is sent, but before he receives it, sells the goods for 100 rupees. The sale is binding on A, and B is entitled to five rupees as his commission.
(b) A, at Madras, by letter, directs B to sell for him some cotton lying in a warehouse in Bombay, and afterwards, by letter, revokes his authority to sell, and directs B to send the cotton to Madras. B, after receiving the second letter, enters into a contract with C, who knows of the first letter, but not of the second, for the sale to him of the cotton. C pays B the money, with which B absconds. C's payment is good as against A.
(c) A directs B, his agent, to pay certain money to C. A dies, and D takes out probate to his will. B, after A's death, but before hearing of it, pays the money to C. The payment is good as against D, the executor.
Illustration (a) shows protection of the agent: the letter was sent but not received, so the sale is binding on A and B gets his commission. Illustration (b) shows protection of a third person: C knew only of the first letter. Illustration (c) shows that the same logic reaches death of the principal.
If you are about to end an agency, the date on which the other side knows is as important as the date you decide. A legal consultation can help you plan how to give notice and how to prove when it was received.
Section 209: the agent's duty when the principal dies or becomes of unsound mind
"When an agency is terminated by the principal dying or becoming of unsound mind, the agent is bound to take, on behalf of the representatives of his late principal, all reasonable steps for the protection and preservation of the interests entrusted to him."
The duty is to take "all reasonable steps" for "protection and preservation" of the interests entrusted to him. The section says "the representatives of his late principal" and does not say who they are. Section 201 lists death or unsound mind as a mode of termination.
Section 210: sub-agents
"The termination of the authority of an agent causes the termination (subject to the rules herein contained regarding the termination of an agent's authority) of the authority of all sub-agents appointed by him."
When the agent's authority ends, the authority of every sub-agent he appointed ends with it, subject to the rules on termination, which include section 208 on knowledge. Our article on sections 191 to 195 explains sub-agents. Section 210 speaks of "sub-agents"; the substituted agent of section 194 is an agent of the principal, not a sub-agent, and section 210 does not mention him.
A modern example (ours, not the Act's)
Deshmukh Seeds appoints Ramesh as its dealer in Nashik, with commission on sales. On a Monday the company emails him that the arrangement is over. Ramesh is travelling and does not open the email until Wednesday; on Tuesday he sells stock to a farmer, Bhaskar, who has no idea of any revocation. On the words of section 208, termination does not take effect as to Ramesh before it becomes known to him, nor as to Bhaskar before it becomes known to him. The sale stands, as in illustration (a), and Ramesh's commission is in play as that illustration shows.
On other facts, if the company's owner dies on Monday and Ramesh, not yet aware, collects a cheque from a customer on Tuesday, section 208 illustration (c) shows the payment is good. Once Ramesh learns of the death, section 209 requires him to take all reasonable steps to protect the interests entrusted to him on behalf of the owner's representatives, such as safeguarding stock and records. If Ramesh had engaged a helper, section 210 means the helper's authority ends when Ramesh's does.
What can the parties change?
Nothing in these sections invites contrary terms, but an agency contract can set out how notice must be given (for example in writing to a named address) and what the agent must do on termination. Third persons are outside the contract, so the knowledge rule in section 208 protects them regardless. A principal who wants termination to bind outsiders should make sure they know, for instance by telling known customers directly.
Practical points
- Principals: communicate termination to the agent and to known third persons, and keep proof.
- Agents: on learning of a principal's death or unsound mind, act to protect the interests entrusted to you.
- Third persons: if you learn of a revocation, section 208 no longer protects dealings after that point on the words of the section.
- Sub-agents: the end of the agent's authority ends yours (s.210).
Need help with the timing of a termination?
Our legal consultation service can help you plan how and when to end an agency so that the agent and third persons are on notice, and explain how sections 207 to 210 may apply to your facts. Other laws may also apply.
Key takeaways
- Revocation and renunciation may be express or implied in conduct (s.207); the Act's illustration is A letting his house himself after empowering B to let it.
- Termination does not take effect as to the agent before it becomes known to him, or as to third persons before it becomes known to them (s.208).
- On the principal's death or unsound mind the agent must take all reasonable steps to protect and preserve the interests entrusted to him (s.209).
- Termination of the agent's authority ends the authority of all sub-agents he appointed (s.210).
Read next
- Sections 203 to 206: revocation of authority, compensation and notice
- Section 211: agent's duty in conducting principal's business
- Section 201: termination of agency
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.