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Mohan owes an amount to Meenakshi. He authorises her to sell the land belonging to him and to…

Under section 202 of the Indian Contract Act, where the agent has an interest in the property that forms the subject matter of the agency, the agency cannot, in the absence…

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Mohan owes an amount to Meenakshi. He authorises her to sell the land belonging to him and to appropriate her dues from the sale proceeds. Which of the following is correct under the Indian Contract Act, 1872?

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Answer and explanation

Correct answer D

Under section 202 of the Indian Contract Act, where the agent has an interest in the property that forms the subject matter of the agency, the agency cannot, in the absence of an express contract, be terminated to the prejudice of that interest. Meenakshi is authorised to sell Mohan's land and pay her own dues from the proceeds, so her "Authority cannot be terminated"; the illustration to section 202 shows that it is not ended by the principal's death or insanity either.

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