CLASS ACTIVITY WEEK 8 - BUSINESS LAW

Zara, a property owner, allowed her friend Amir to negotiate a rental deal with a potential tenant on her behalf, even though there was no formal written agreement between them. Amir successfully secured a tenant and collected a deposit. Later, Zara refused to honour the arrangement, claiming Amir was never her agent.

Which of the following best explains whether an agency relationship existed between Zara and Amir?

• No agency relationship exists unless there is a written contract.

• An agency relationship can only be formed through express agreement.

• An agency relationship may exist through implied conduct or subsequent ratification.

• Amir is liable for acting without written permission.

Under Section 137 CA 1950, which statement is TRUE regarding who can be an agent?

• only persons above 18 years old can be agents

• anyone can be an agent, but a minor agent is not responsible to the principal

• only companies can be agent

• only Malaysian citizens can be agents

Which of the following is not a valid way to create an agency relationship?

• By express agreement

• By implied agreement

• By estoppel

• By accident

An agency by estoppel arises when:

• The agent acts outside the principal’s authority

• The principal denies the existence of the agent

• The principal's conduct leads a third party to believe someone is their agent

• The agent makes a public announcement

What is actual authority in agency law?

• Authority the agent claims to have

• Authority given by law

• Authority expressly or impliedly given by the principal

• Authority recognized by third parties

When is the principal most likely to be held liable for the actions of the agent?

• the agent acts outside the scope of actual authority and without apparent authority

• the agent acts within the scope of actual authority

• the agent acts for an undisclosed principal without the principal's knowledge

• the agent acts in a personal capacity, not as an agent

If an agent exceeds their actual authority but the principal later approves the act, what is this called?

• Implied authority

• apparent authority

• authority by ratification

• authority by necessity

In which of the following situations could an agent be said to possess ostensible (or apparent) authority, despite lacking actual permission from the principal?

• If the agent wears official attire and speaks confidently, leading others to assume authority.

• Where the principal’s own conduct has created an impression of the agent's legitimacy in the eyes of third parties.

• When an agent acts repeatedly in a similar fashion without any prior disputes or challenges.

• If internal documents silently permit an agent’s actions but never reach the public eye.

If an agent, while acting within the general boundaries of their assigned role, commits an act of fraud unknown to the principal, which of the following best represents the principal’s liability status?

• The principal is shielded completely from legal repercussions as fraud is a personal tort.

• The agent alone bears responsibility, unless the fraud benefits the principal more than the agent.

• The principal may still be exposed to liability if the deceit falls within the visible range of the agent’s job description.

• Principals cannot be sued unless they specifically instructed the fraudulent action.

Farid is appointed as a sales agent for TechMobi Sdn Bhd with the authority to negotiate but not to enter into contracts. Despite this, he enters into a sales contract with a major client. The company later tries to repudiate the contract, arguing that Farid exceeded his authority.

What type of authority may bind TechMobi Sdn Bhd to the contract despite the limitations?

• Actual authority

• Apparent (ostensible) authority

• Customary authority

• Revoked authority