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A contracts to sell 100 bales of cotton to B, who appears to buy on their own account. A later…

Section 233 allows the third party to hold a personally liable agent, the principal, or both liable. Its cotton-bales illustration gives A those choices. Section 234 can…

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A contracts to sell 100 bales of cotton to B, who appears to buy on their own account. A later discovers that B was acting for an undisclosed principal, C. On these facts, under the Indian Contract Act, 1872, whom may A hold liable for the price?

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Answer and explanation

Correct answer C

Section 233 allows the third party to hold a personally liable agent, the principal, or both liable. Its cotton-bales illustration gives A those choices. Section 234 can limit the choice if the third party induced one of them to act on the belief that only the other would be held liable.

Option feedback

Option A

C can be held liable, and the personally liable agent is also available under section 233.

Option B

B can be held liable, and the undisclosed principal is also available under section 233.

Option C

Section 233 and its illustration allow A to hold the agent, the principal, or both liable on the stated facts.

Option D

Section 233 allows A to proceed against either or both of them.

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