1. Core Legal Answer & Context: Generally, a contract of agency, like most ordinary contracts, is revocable. This means the principal can terminate the agent's authority, or the agent can renounce their appointment. This principle is based on the consensual nature of agency, where the relationship exists at the will of both parties. However, there are specific circumstances where an agency becomes irrevocable, meaning it cannot be terminated by the principal to the prejudice of the agent or third parties. The most significant exception is an 'agency coupled with interest.'

An agency is said to be 'coupled with interest' when the agent has a personal stake or interest in the subject matter of the agency, in addition to their commission or remuneration. This interest must be proprietary and not merely an expectation of profit from the agency. In such cases, the authority given to the agent is intended to protect or secure that interest, and therefore, the principal cannot unilaterally revoke it without the agent's consent, especially if such revocation would harm the agent's vested interest.

2. Relevant Statutes and Sections:

• Indian Contract Act, 1872:
  • Section 201: Lays down the general modes of termination of agency, including revocation by the principal or renunciation by the agent.
  • Section 202: This is the pivotal section for irrevocability. It states: "Where the agent has himself an interest in the subject-matter of the agency, the agency cannot, in the absence of an express contract, be terminated to the prejudice of such interest." This section codifies the principle of agency coupled with interest.
  • Section 203: Allows the principal to revoke the agent's authority at any time before the authority has been exercised so as to bind the principal.
  • Section 204: Deals with revocation where the agent has partly exercised authority.

3. Important Landmark Cases:

• Smart v. Sandars (1848) 5 C.B. 895 (English Court): This case is foundational to the concept of agency coupled with interest. It held that if an authority is given to an agent to protect or secure some interest of the agent, it cannot be revoked by the principal. For instance, if goods are consigned to a factor for sale, and the factor has made advances to the principal against those goods, the factor has an interest in the goods and the agency to sell them becomes irrevocable until the advances are repaid.
• Lakshminarayan Ram Gopal & Son Ltd. v. Government of Hyderabad (1954) AIR 1954 SC 364 (Indian Supreme Court): The Supreme Court of India affirmed the principle enshrined in Section 202 of the Indian Contract Act. It reiterated that an agency coupled with interest is irrevocable, emphasizing that the agent's interest must be in the subject matter itself, not merely in the remuneration arising from the exercise of the agency.

4. Clear Conclusion: While the general rule is that a contract of agency is revocable by either party, Section 202 of the Indian Contract Act, 1872, provides a significant exception for an 'agency coupled with interest.' In such cases, where the agent has a proprietary interest in the subject matter of the agency, the principal cannot revoke the agency to the detriment of that interest. This irrevocability serves to protect the agent's vested rights, making it 'impossible to repudiate' the agency under these specific circumstances.