Quiz on Law of Agency Authority

Which of the following scenarios best illustrates the concept of apparent authority?

• An agent sells a car for less than the minimum price set by the principal.

• An agent allows a potential buyer to test drive a car without explicit permission from the principal.

• A principal's conduct leads a third party to believe that an agent has authority to act on their behalf.

• An agent acts within the express authority given by the principal.

In which situation would an agent be personally liable for their actions?

• When acting within the actual authority given by the principal.

• When acting within the apparent authority perceived by a third party.

• When exceeding the authority given by the principal.

• When acting in accordance with trade customs.

Which case would most likely involve the principle of estoppel in agency law?

• An agent acts without any authority and the principal ratifies the act.

• An agent's authority is terminated but the principal fails to notify third parties.

• An agent acts within the implied authority given by the principal.

• An agent acts in an emergency to prevent loss to the principal.

What is the primary difference between actual and apparent authority?

• Actual authority is always written, while apparent authority is always oral.

• Actual authority is given by the principal, while apparent authority is perceived by third parties.

• Actual authority is implied, while apparent authority is express.

• Actual authority is based on trade customs, while apparent authority is based on the agent's conduct.

Which of the following best describes the effect of an agent acting within their apparent authority?

• The principal is not bound by the agent's actions.

• The agent is personally liable for any contracts made.

• The principal is bound by the agent's actions as if they had actual authority.

• The third party must seek confirmation from the principal.

Under what condition can an agent's implied authority be established?

• When the principal explicitly states the authority in writing.

• When the agent acts in a manner necessary to execute the express authority.

• When the agent acts without any authority from the principal.

• When the principal is unaware of the agent's actions.

Which of the following is NOT a situation where apparent authority may arise?

• The principal's conduct leads a third party to believe the agent has authority.

• The agent's authority is terminated without notice to third parties.

• The agent acts within the express authority given by the principal.

• The principal's words lead a third party to believe the agent has authority.

What is the legal consequence if an agent acts outside their actual authority but within their apparent authority?

• The agent is personally liable for the contract.

• The principal is bound by the contract.

• The contract is void.

• The third party must renegotiate the contract.

Which of the following best illustrates the concept of implied authority?

• An agent is explicitly told to sell a car for no less than RM 50,000.

• An agent allows a potential buyer to test drive a car based on trade customs.

• An agent acts without any instructions from the principal.

• An agent's authority is terminated but they continue to act on behalf of the principal.

In which case would the principle of estoppel prevent a principal from denying an agent's authority?

• The agent acts within the express authority given by the principal.

• The principal's conduct leads a third party to believe the agent has authority.

• The agent acts in an emergency to prevent loss to the principal.

• The principal explicitly denies the agent's authority to a third party.