The Pretended Agent under Sections 235 and 236 of the Indian Contract Act, 1872: Liability for Falsely Representing Authority, and Why a Self-Styled Agent Cannot Enforce the Contract for Himself

Two different people can misuse the description agent. The first claims to act for a principal who never authorised him. The second claims to act for a principal when in truth he is acting for himself. The Act deals with them in consecutive sections. Section 235 makes the first liable to the third party for the loss caused by the false claim of authority. Section 236 denies the second any right to enforce the contract, since the other party contracted with a supposed agent and not with him. Together they ensure that the person who created the false impression bears its consequences.

1. The Two Sections

Sections 235 and 236, Indian Contract Act, 1872

235. Liability of pretended agent. A person untruly representing himself to be the authorised agent of another, and thereby inducing a third person to deal with him as such agent, is liable, if his alleged employer does not ratify his acts, to make compensation to the other in respect of any loss or damage which he has incurred by so dealing.

236. Person falsely contracting as agent not entitled to performance. A person with whom a contract has been entered into in the character of agent, is not entitled to require the performance of it, if he was in reality acting, not as agent, but on his own account.

	Section 235	Section 236
The false claim	I have authority from P, when I do not	I am acting as agent, when I am really acting for myself
Who is protected	The third party who relied on the claimed authority	The third party who contracted with a supposed agent
What the section does	Imposes a LIABILITY to compensate	Denies a RIGHT to demand performance
Escape route	The alleged principal RATIFIES, under Sections 196 to 200	None under the section; the general law allows a narrow exception, below

2. Section 235: Breach of Warranty of Authority

📖 Yonge v. Toynbee, [1910] 1 KB 215 (CA)

Facts: A firm of solicitors was instructed to defend an action. Before the proceedings had gone far their client became of unsound mind, which terminated their authority. Unaware of this, they continued to act, entering an appearance and taking steps in the action. The plaintiff, having incurred costs in dealing with them, sought to recover those costs from the solicitors personally.

Held: The solicitors were liable. By acting in the proceedings they had impliedly warranted that they had authority to act for the defendant. That warranty was untrue once his insanity had terminated it, and it was immaterial that they did not know of the insanity and acted in perfect good faith. The liability is contractual, arising on the warranty, and does not depend on fraud or negligence.

Ratio: A person who acts as agent warrants that he has the authority he claims. He is liable for its breach even where his authority has ended without his knowledge, since the liability rests on the warranty and not on fault.

Good faith is no defence. The same principle was established in Collen v. Wright, (1857) 8 E & B 647, where the agent honestly believed he had authority to grant a lease.
Ratification removes the liability, because the principal then becomes bound and the third party gets what he bargained for. Section 235 is expressly subject to it.
The measure is the loss suffered by dealing with the pretended agent, which is ordinarily what the third party would have recovered against the principal had the authority existed, subject to remoteness and mitigation under Section 73.
A third party who knew the agent lacked authority cannot claim, having suffered no loss from any false impression.
Section 208 interacts with it. An agent whose authority has been revoked without his knowledge may still bind the principal as regards third parties who also did not know of the revocation, in which case no claim under Section 235 arises.

3. Section 236: The Self-Styled Agent Cannot Enforce

📖 Bickerton v. Burrell, (1816) 5 M & S 383

Facts: The plaintiff entered into a contract in which he described himself as acting as agent for a principal. He later sued on the contract in his own name, contending that he had in truth been the principal throughout.

Held: He could not recover. Having contracted in the character of an agent, he could not turn round and sue as principal without giving the other party notice, before the action, that he was the real principal. The other party had contracted on the footing that he was dealing with someone standing behind the agent, and was entitled to the protection of that footing.

Ratio: A person who contracts as agent cannot, without more, enforce the contract as principal. Section 236 states the rule in absolute terms where he was in reality acting on his own account.

⚠ The narrow exception: where the identity of the principal did not matter

The English courts have allowed a person who contracted as agent for an unnamed principal to disclose himself as the principal and sue, where the other party would have contracted with anyone and suffers no prejudice. The leading illustration is Schmaltz v. Avery, (1851) 16 QB 655, where a charterparty was signed as agents of the freighter without naming him. The exception does not apply where the contract described him as agent for a named principal, or where the other party relied on the identity or credit of the supposed principal, or where he would not have contracted with the agent personally. Section 236 is framed without qualification, and the safe course in an Indian answer is to state the rule as the Act states it and note the exception as a matter of general law, confined to cases of no prejudice.

One false agent incurs a liability, the other loses a right

4. Why the Two Sections Stand Together

Both protect the third party's reliance on the description agent. He decided whom he was dealing with on the strength of it.
Section 235 compensates him for the loss when the principal is not bound.
Section 236 prevents him from being held to a bargain with a person he did not choose to contract with.
Neither depends on fraud. A pretended agent may be honest, as in Collen v. Wright and Yonge v. Toynbee, and a person acting on his own account may have had innocent reasons for the description.
Both are distinct from the undisclosed principal under Sections 231 and 232, where the agent really was acting for a principal but did not say so. There the principal may enforce, subject to the third party's rights.

5. The Position Stated Shortly

Section 235 makes a person who untruly represents himself as an authorised agent liable to compensate the third party, unless the alleged principal ratifies.
The liability rests on an implied warranty of authority and does not depend on fraud or negligence.
Yonge v. Toynbee: solicitors whose authority ended on their client's insanity were liable though they did not know of it.
Section 236 denies a person who contracted in the character of agent, but was acting on his own account, any right to require performance.
Bickerton v. Burrell: one who contracts as agent cannot sue as principal without first giving notice that he was the principal.
Schmaltz v. Avery allows a narrow exception where the principal was unnamed and the other party suffers no prejudice.
Both sections protect the third party's reliance on the description agent, and both differ from the undisclosed principal under Sections 231 and 232.

6. Related Topics and Provisions

Topic or provision	Connection
Principal and Third Parties under Sections 226 to 238	Excess of authority, personal liability and the undisclosed principal
Ratification under Sections 196 to 200	The escape from liability under Section 235
Termination of Agency under Sections 201 to 210	Section 208, and authority ended without the agent's knowledge
Sections 235 and 236, Indian Contract Act	The pretended agent
Sections 231 and 232, Indian Contract Act	The undisclosed principal, for contrast
Section 73, Indian Contract Act	Measure of compensation under Section 235