Sections 222 to 225 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.
The agent owes duties to the principal; the principal owes some to the agent. Section 222 says the employer must indemnify the agent against the consequences of all lawful acts done in exercise of his authority. Section 223 extends this to acts done in good faith even if they injure third persons. Section 224 draws the line at criminal acts. Section 225 requires the principal to compensate the agent for injury caused by the principal's own neglect or want of skill.
The employer must indemnify the agent against the consequences of all lawful acts done in exercise of the authority conferred (s.222). Where the agent does the act in good faith, the employer must indemnify him against its consequences even if it injures the rights of third persons (s.223). Where the act employed is criminal, the employer is not liable to indemnify, whether the promise is express or implied (s.224). The principal must compensate the agent for injury caused by the principal's neglect or want of skill (s.225). Each section has illustrations.
If you employ agents and want to be clear about expenses, costs and protection, an agreement drafting adviser can help you state what you will cover and what you will not.
Section 222: lawful acts
"The employer of an agent is bound to indemnify him against the consequences of all lawful acts done by such agent in exercise of the authority conferred upon him."
The section needs two things: the acts are lawful, and they are done "in exercise of the authority conferred upon him". Indemnity itself is explained in section 124, which our overview of indemnity and guarantee covers.
The Act's illustrations.
(a) B, at Singapur, under instructions from A of Calcutta, contracts with C to deliver certain goods to him. A does not send the goods to B, and C sues B for breach of contract. B informs A of the suit, and A authorizes him to defend the suit. B defends the suit, and is compelled to pay damages and costs, and incurs expenses. A is liable to B for such damages, costs and expenses.
(b) B, a broker at Calcutta, by the orders of A, a merchant there, contracts with C for the purchase of 10 casks of oil for A. Afterwards A refuses to receive the oil, and C sues B. B informs A, who repudiates the contract altogether. B defends, but unsuccessfully, and has to pay damages and costs and incurs expenses. A is liable to B for such damages, costs and expenses.
In both, the agent acted under the principal's instructions, kept him informed, and the principal is liable for damages, costs and expenses.
Section 223: acts done in good faith
"Where one person employs another to do an act, and the agent does the act in good faith, the employer is liable to indemnify the agent against the consequences of that act, though it cause an injury to the rights of third persons."
Section 223 goes further than section 222: even if the act injures the rights of third persons, the employer must indemnify, if the agent acted in good faith.
The Act's illustrations.
(a) A, a decree-holder and entitled to execution of B's goods, requires the officer of the Court to seize certain goods, representing them to be the goods of B. The officer seizes the goods, and is sued by C, the true owner of the goods. A is liable to indemnify the officer for the sum which he is compelled to pay to C, in consequence of obeying A's directions.
(b) B, at the request of A, sells goods in the possession of A, but which A had no right to dispose of. B does not know this, and hands over the proceeds of the sale to A. Afterwards C, the true owner of the goods, sues B and recovers the value of the goods and costs. A is liable to indemnify B for what he has been compelled to pay to C, and for B's own expenses.
Section 224: criminal acts
"Where one person employs another to do an act which is criminal, the employer is not liable to the agent, either upon an express or an implied promise, to indemnify him against the consequences of that Act."
A footnote in the source says "See s. 24, supra", which is the section on agreements void where the consideration or object is unlawful in part (see our article on section 24).
The Act's illustrations.
(a) A employs B to beat C, and agrees to indemnify him against all consequences of the act. B thereupon beats C, and has to pay damages to C for so doing. A is not liable to indemnify B for those damages.
(b) B, the proprietor of a newspaper, publishes, at A's request, a libel upon C in the paper, and A agrees to indemnify B against the consequences of the publication, and all costs and damages of any action in respect thereof. B is sued by C and has to pay damages, and also incurs expenses. A is not liable to B upon the indemnity.
The Act speaks of an act "which is criminal". It does not list offences here. The criminal law is outside this article.
Section 225: injury from the principal's neglect
"The principal must make compensation to his agent in respect of injury caused to such agent by the principal's neglect or want of skill."
A footnote reads "Cf. the Indian Fatal Accidents Act, 1855 (13 of 1855)", attached at the word "injury". The footnote only invites comparison; this article does not discuss that Act.
The Act's illustration. A employs B as a bricklayer in building a house, and puts up the scaffolding himself. The scaffolding is unskilfully put up, and B is in consequence hurt. A must make compensation to B.
| Section | Principal's duty | Condition or limit |
|---|---|---|
| 222 | Indemnify against consequences of all lawful acts | Done in exercise of authority conferred |
| 223 | Indemnify against consequences of acts done in good faith, though injuring third persons | Agent acts in good faith |
| 224 | No liability to indemnify | Act employed is criminal |
| 225 | Compensate for injury | Caused by principal's neglect or want of skill |
A modern example (ours, not the Act's)
Joshi Motors appoints Hari, a dealer's agent in Nagpur, to sell second-hand vehicles on commission. At Joshi's request Hari sells a car and hands over the money; later the real owner, who had never authorised Joshi to sell, sues Hari and recovers the value. Hari acted in good faith, not knowing of the defect in Joshi's title. On the reasoning of illustration (b) to section 223, Joshi must indemnify Hari for what Hari had to pay to the true owner and for Hari's own expenses.
If Joshi had asked Hari to forge a registration paper, an act which is criminal, section 224 says Joshi is not liable to indemnify him, even if Joshi promised to. And if Joshi's yard crane is kept in an unsafe state and injures Hari at work through Joshi's neglect, section 225 requires Joshi to compensate him for injury caused by the principal's neglect or want of skill.
What can the parties change?
The sections do not mention contrary agreement. A contract can set out the costs and expenses the principal will meet, how claims are made, and who will conduct the defence of any claim. Section 224 shows that an agreement to indemnify against a criminal act does not bind the employer, whatever the parties write. Beyond that, this article does not go further than the text.
Practical points
- Agents: tell the principal promptly of any claim made against you (as in illustrations (a) and (b) under section 222), and keep proof that you acted within authority and in good faith.
- Principals: state in the contract which costs you will reimburse and how a claim should be notified.
- Never agree to an indemnity for an unlawful act: section 224 offers no protection.
- Safe working conditions: section 225 links the principal's neglect to the agent's injury.
Need help drafting indemnity terms for agents?
Our agreement drafting service can help you record what a principal will reimburse or indemnify, how claims are handled, and what is outside any indemnity. Other laws may also apply to your sector.
Key takeaways
- The employer must indemnify the agent against the consequences of all lawful acts done in exercise of the authority conferred (s.222).
- Where the agent acts in good faith, he is indemnified though the act injures third persons' rights (s.223).
- No indemnity for a criminal act, express or implied (s.224).
- The principal must compensate the agent for injury caused by the principal's neglect or want of skill (s.225).
Read next
- Sections 217 to 221: agent's retainer, remuneration, misconduct and lien
- Section 226: enforcement and consequences of agent's contracts
- Section 124: contract of indemnity defined
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.