LAW OF AGENCY

Who can become a principal according to the Contracts Act 1950?

• Any person above 21 years old

• Any person of sound mind and above 18 years old

• Anyone with authority from the court

• Any legal entity

Which of the following is a method of creating an agency?

• Assignment

• Delegation

• Ratification

• Subrogation

What is an implied agency?

• Agency created by written agreement

• Agency formed based on the conduct or situation

• Agency formed through a formal contract

• Agency created through verbal communication

What is the meaning of agency by estoppel?

• When the principal prevents the agent from resigning

• When the agent refuses to act on behalf of the principal

• When the agent is estopped from acting for multiple principals

• When the principal makes a third party believe a person is their agent

Which of the following is NOT a valid way to terminate an agency?

• Death of the agent

• Bankruptcy of the principal

• Unilateral revocation by the third party

• Expiration of the agency contract

In which case an agency cannot be revoked?

• When the agent has an interest in the property

• When the agency is for a fixed term

• When the agent agrees to the revocation

• When the principal gives notice

Which of the following is a duty of an agent towards the principal?

• To delegate authority

• To make a secret profit

• To obey instructions

• To act on behalf of third parties

What happens if an agent exceeds their authority and the principal does not ratify the action?

• The contract remains binding

• The agent is personally liable

• The third party is liable

• The principal is forced to accept the action

What is actual authority?

• Authority that is explicitly given by the principal

• Authority granted through formal legal action

• Authority implied from the actions of the agent

• Authority assumed by the agent without the principal’s knowledge

What is agency by necessity?

• When an agent is appointed by express agreement

• When a principal orders the agent to act

• When a third party declares someone an agent

• When a person acts as an agent in an emergency without formal authority