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CS Professional · Drafting, Pleadings and Appearances · Drafting of Commercial Contracts

Sunita Textiles, through its agent Vikas, buys yarn from Gupta Mills. Vikas does not disclose the name of his principal in the written contract, and the contract is silent on his personal liability. Gupta Mills sues Vikas personally for the price. What is the position under the Indian Contract Act, 1872?

A contract making Vikas personally bound is presumed. Normally an agent is not personally liable, but the Contract Act presumes a contract to the contrary where the agent does not disclose his principal's name, so the drafter should name the principal.

  1. AVikas is never personally liable as an agent
  2. BOnly the undisclosed principal can be sued, never the agent
  3. CVikas is liable only if the contract is registered
  4. DA contract making Vikas personally bound is presumed to exist because he did not disclose his principal's nameCorrect

Explanation

An agent is ordinarily not personally bound, but a contract to the contrary is presumed where the agent does not disclose the principal's name. Hence a drafter should name the principal or state the agent's capacity expressly. Option one ignores this exception.

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