What is the liability of a numismatic dealer who acts as an agent selling notes on behalf of another collector?
A dealer acting as agent for a collector-principal carries two distinct liability profiles: liability to the buyer (for misrepresentation and deficiency, which attaches to the agent as the visible contracting party) and liability to the principal (fiduciary obligations of honest dealing and accurate accounting). When the buyer is defrauded, they can generally sue the agent — the person they dealt with. The agent can then seek indemnification from the principal if the defect was the principal's fault. But from the buyer's perspective, the agent is the seller.
The agency relationship — who is the visible seller
When a dealer says 'I am selling this on behalf of a collector' and conducts the sale, they are acting as the visible contracting party from the buyer's perspective. The Indian Contract Act 1872 Section 226 provides that an agent who enters a contract for their principal can be sued on that contract if the agent does not disclose the principal's identity. Even where the principal is disclosed, the agent who makes representations about the goods is personally liable for those representations under the CPA 2019 — they are the 'trader' who made the sale.
When the agent is not liable — full disclosure
An agent who fully discloses: (1) that they are acting as agent; (2) the identity of the principal; and (3) that representations about the note are based solely on what the principal told them and cannot be independently verified — may be able to limit their personal liability. But this limitation requires clear, upfront disclosure to the buyer. A dealer who simply sells without mentioning agency status cannot retroactively claim 'I was just the agent' when a dispute arises. The buyer relied on the dealer's representation.
The principal's liability — what the buyer can pursue
When the agent has disclosed the principal's identity, the buyer may also have a direct claim against the principal under ICA 1872 Section 237 (apparent authority) or under CPA 2019 if the principal was the 'trader' who originated the false description. In practice, the buyer pursues whoever is identifiable and has assets — usually the dealer-agent. The dealer-agent then has their own claim against the principal for indemnification under their agency agreement.
Laws & authorities referenced in this chapter
Indian Contract Act 1872 — §226 (agent liable on contracts where principal not disclosed), §237 (apparent authority of agent)
Consumer Protection Act 2019 — §2(36) (trader: the agent who conducts the sale is the trader vis-à-vis the buyer)
Sale of Goods Act 1930 — §19 (implied terms in sale by description: apply to the agent who makes the sale as the visible seller)
Dealer-agent is the visible seller: liable to buyer for misrepresentation and deficiency unless principal fully disclosed AND buyer informed that representations are unverified from the agent's own knowledge. Buyer can sue the agent as the contracting party. Agent can seek indemnity from principal where the defect was the principal's fault. Practical advice for agent-dealers: always disclose agency status explicitly in writing; note that your condition assessment is based on the principal's representation, not independent verification.
This is educational content, not legal advice. For a specific situation, please consult a qualified legal professional. Excerpted from Currency, Coins & The Law by Mayank Agarwal, Part 16: Dealer Accountability — Who is a 'Dealer', Mandatory Disclosures, Representation vs Warranty, Agent Liability, Safe Listing Practices.