Sections 227 and 228 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.
Agents sometimes do more than they are told. Sections 227 and 228 give a two-step answer. If the part within authority can be separated from the part beyond it, the principal is bound only by the part within authority. If the two cannot be separated, the principal is not bound to recognise the transaction at all.
When an agent does more than he is authorized to do, and the part within his authority can be separated from the part beyond it, so much only of what he does as is within his authority is binding as between him and his principal (s.227). Where the excess cannot be separated from what is within authority, the principal is not bound to recognize the transaction (s.228). The Act's illustrations: two insurance policies (ship and cargo) and a single purchase of sheep and lambs.
Section 227: separable excess
"When an agent does more than he is authorized to do, and when the part of what he does, which is within his authority, can be separated from the part which is beyond his authority, so much only of what he does as is within his authority is binding as between him and his principal."
Conditions:
- The agent did more than he was authorised to do.
- The authorised part can be separated from the unauthorised part.
Result: only the authorised part binds "as between him and his principal".
The Act's illustration (s.227). A, being owner of a ship and cargo, authorizes B to procure an insurance for 4,000 rupees on the ship. B procures a policy for 4,000 rupees on the ship, and another for the like sum on the cargo. A is bound to pay the premium for the policy on the ship, but not the premium for the policy on the cargo.
Two separate policies make the separation easy.
Section 228: inseparable excess
"Where an agent does more than he is authorized to do, and what he does beyond the scope of his authority cannot be separated from what is within it, the principal is not bound to recognize the transaction."
The Act's illustration (s.228). A authorizes B to buy 500 sheep for him. B buys 500 sheep and 200 lambs for one sum of 6,000 rupees. A may repudiate the whole transaction.
The single sum of 6,000 rupees for sheep and lambs together is what makes separation impossible, so A may repudiate the whole transaction.
| Question | Section 227 | Section 228 |
|---|---|---|
| Did the agent exceed authority? | Yes | Yes |
| Can the authorised part be separated? | Yes | No |
| Result | The principal is bound by the authorised part only | The principal is not bound to recognise the transaction |
| The Act's illustration | Ship policy binds; cargo policy does not | Sheep and lambs for one sum: A may repudiate the whole |
If an agent has gone beyond what you authorised and you want to respond in writing, a legal dispute resolution adviser can help you decide whether to bind yourself to part, repudiate or ratify.
The basic rule, where the agent stays within authority, is in section 226.
How these sections relate to ratification and apparent authority
These sections do not say that the principal must repudiate, or that he cannot accept the whole. Sections 196 to 200 allow him to ratify what was done without authority; see our article on sections 196 to 200. Section 199 says ratifying one act ratifies the whole transaction of which it formed a part. Section 237 deals with the case where the principal has induced third persons to believe that the acts were authorised. Sections 227 and 228 speak of what is binding "as between him and his principal" (s.227) and whether the principal is "bound to recognize" (s.228); they say nothing about the third person's rights against the agent, which this article does not go into.
A modern example (ours, not the Act's)
Nair Textiles authorises Imtiaz, its purchasing agent, to buy 300 metres of cotton fabric from a mill. Imtiaz buys the 300 metres and, on a separate invoice at a separate price, 100 metres of silk. The authorised purchase can be separated from the unauthorised one. Under section 227, Nair is bound by the cotton purchase and not by the silk.
Now suppose Imtiaz had bought 300 metres of cotton and 100 metres of silk as a single lot for one price, with no separate price for the cotton. The authorised part cannot be separated from the part beyond it. Under section 228, Nair is not bound to recognise the transaction. As with the sheep and lambs, it may repudiate the whole.
What can the parties change?
The sections turn on how the authority was drawn and how the agent's dealing was structured. Principal and agent can define authority clearly, for example by giving a maximum quantity or value and by requiring separate invoices for each item. This makes any excess easier to separate under section 227. The sections themselves do not mention contrary agreement.
Practical points
- Principals: state limits (quantity, value, items) in writing, and ask for separate documents for separate items.
- Agents: do not bundle authorised and unauthorised items into one transaction; ask the principal first.
- Third persons: if the deal looks larger than the agent's role, ask to see his authority.
- If your agent exceeded authority: decide quickly whether to ratify, accept the separable part, or repudiate.
Need help when an agent has gone beyond his authority?
Our legal dispute resolution service can help you look at what the agent did, what he was authorised to do, and whether to accept, limit or repudiate the transaction under sections 227 and 228. Other laws may also apply.
Key takeaways
- If an agent does more than he is authorised and the authorised part can be separated, only that part is binding as between him and his principal (s.227).
- If the excess cannot be separated from what is within authority, the principal is not bound to recognise the transaction (s.228).
- The Act's illustrations: a ship policy (binding) and a cargo policy (not), and sheep with lambs for one sum (A may repudiate the whole).
- Ratification and the principal's own conduct are dealt with in other sections.
Read next
- Section 226: enforcement and consequences of agent's contracts
- Section 229: consequences of notice given to agent
- Sections 196 to 200: ratification of unauthorised acts
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.