Section 205 of ICA : Section 205: Compensation For Revocation By Principal, Or Renunciation By Agent

Explanation using Example

Imagine that Priya hires Raj to be her real estate agent for a period of six months to sell her house, with a clear understanding that Raj will receive a commission upon the sale. This agreement is an implied contract that the agency will continue for the specified period. If Priya decides to revoke Raj's agency just two months in because she has a friend who wants to try selling the house, without Raj having done anything wrong, Priya would be revoking the agency without sufficient cause. Under Section 205 of The Indian Contract Act, 1872, Priya would likely owe compensation to Raj for ending the agency prematurely and without a valid reason.