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ICAEW Law: QB2020 > 03. Agency. > Flashcards

03. Agency. Flashcards

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1
Q

T/F: A principal may still find themselves bound into a contract by an agent whose authority has been revoked.

A

TRUE

if the principal has not informed the third party that the agent’s authority is revoked.

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2
Q

T/F: a victim of a fraud by an agent whose authority has been revoked is still potentially obliged to settle a supplier’s invoice.

A

TRUE

if the supplier did not know that the agent’s authority had been revoked.

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3
Q

T/F: Modern agency law generally requires an existing contractual relationship between parties if an agency of necessity is to be established.

A

TRUE

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4
Q

Modern agency law generally requires an existing contractual relationship between parties if an … is to be established.

A

agency of necessity

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5
Q

Modern agency law generally requires an … between parties if an agency of necessity is to be established.

A

existing contractual relationship

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6
Q

T/F: Modern agency law is highly unlikely to allow a person to be bound by the acts of a complete stranger.

A

TRUE

A pre-existing contractual relationship is usually required before an agency of necessity can be established.

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7
Q

An agency by ‘holding out’ can only occur as a result of the behaviour of …

A

the principal.

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8
Q

T/F: a principal may ratify the act of an agent despite expressly forbidding them to perform that act.

A

TRUE

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9
Q

T/F: The ratification of a contract by a principal binds the third party.

A

TRUE

even if at the time of the agent entering into the contract they did not have authority but the contract was nevertheless ratified.

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10
Q

T/F: On ratification of an agent’s contract by a principal, the third party may then choose whether to enforce the contract against the agent or the principal.

A

FALSE

Upon ratification only the principal and the third party are bound by the contract.

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11
Q

Upon the ratification by a principal of a contract entered into by an agent, the third party may only enforce the contract against …

A

the principal.

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12
Q

T/F: Ratification can only validate an agent’s past acts and will not endow any future authority.

A

TRUE

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13
Q

Ratification can only act …

A

retrospectiviely.

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14
Q

A principal whose agent receives undisclosed commissions …

A

may dismiss the agent and require them to account for those commissions.

see Boston Deep Sea Fishing

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15
Q

T/F: An agent is usually entitled to delegate the tasks that they are appointed to undertake as they see fit.

A

FALSE

An agent is usually required to render personal service.

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16
Q

T/F: An agent’s duty of confidentiality ceases once the relationship ends.

A

FALSE

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17
Q

If an agency contract does not mention remuneration …

A

then the agent is entitled to reasonable remuneration.

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18
Q

An agent whose principal owes them money is entitled to exercise a right of … over the princpal’s goods and property.

A

lien

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19
Q

The acts of a partner bind the firm due to the fact that as a partner they have the … authority to do so.

A

implied usual

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20
Q

If a partner enters into contracts in the name of the firm in respect of an unrelated business activity …

A

then the other partners must immediatly take action or they will be estopped from doing so.

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21
Q

A person behaving as a managing director without challenge from the other directors …

A

will be treated as holding that position.

see Buckhurst Properties

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22
Q

A person acting as an agent without challenge from a principal has …

A

the ostensible or apparent authority to bind the principal into contracts with third parties.

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23
Q

T/F: Agency by estoppel requires a pre-existing agency relationship.

A

FALSE

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24
Q

T/F: A principal may still find themselves bound into contracts by an agent whose authority they have revoked.

A

TRUE

Unless they communicate this fact to third parties, then those third parties may enter into contracts via the agent.

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25
Q

T/F: For an agency by estoppel to exist, the third party must show that they have relied upon a representation by a principal.

A

TRUE

the princpal has by words or conduct ‘held out’ the agent as having authority

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26
Q

For an agency by estoppel to exist, the third party must show that they have relied upon a representation by a … that an agent had authority.

A

principal

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27
Q

For an agency by estoppel to exist, the third party must show that they have relied upon a representation by a principal that an agent …

A

had authority

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28
Q

T/F: In agency by estoppel, it is not necessary to show that the claimant’s loss was caused by their reliance on the representation.

A

FALSE

If there is no causal link between the third party’s loss and their reliance upon the representation, the third party will not be able to hold the principal liable.

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29
Q

T/F: In an agency by estoppel, the third party must show that they have relied on a representation that the contracting party was acting as agent for their principal.

A

TRUE

30
Q

T/F: For an agency by estoppel to arise, there must be a pre-existing agency relationship between the principal and the agent.

A

FALSE

31
Q

When an individual revokes the authority of their agent they should …

A

inform all third parties who regularly deal with the agent.

32
Q

Express authority arises only in relation to …

A

a particular contract.

33
Q

T/F: An agent, acting within their authority, can never be liable on a contract which they have entered into on behalf of a third party.

A

FALSE

It may have been specifically intended, or rules of trade custom and usage may apply.

34
Q

T/F: An unnamed principal may never be liable on a contract entered into by an agent with authority.

A

FALSE

once the principal’s identity is revealed they may be sued.

35
Q

If an agent acts without authority then a principal can only be liable on a contract …

A

if they have subsequently ratified it.

36
Q

An agent deliberately acting without authority, causing loss to a third party, may be liable for the tort of …

A

deceit.

37
Q

If an agent, believing that they have authority but in fact having none, may be liable for …

A

breach of warranty of authority.

38
Q

AA yes, PK no

The third party may enforce the contract against …

A

the principal or the agent (they must choose).

39
Q

AA yes, PK no

The principal may enforce the contract against …

A

the third party.

40
Q

AA yes, PK no

The agent may enforce the contract …

A

against the third party, although their right to do so is subordinate to their princicpal’s.

41
Q

AA yes, PK yes

The principal …

A

Is bound in contract with the third party.

42
Q

AA yes, PK yes

The agent …

A

usually drops out of the picture and has no rights or liabilities under the contract.

However the parties might have intended otherwise.

43
Q

If an agent does not disclose the identity of their principal …

A

they are more likely to be considered a contracting party.

44
Q

Situations in which even a properly authorised agent might incur personal liability:

TU*, NI, COS (NT).

A

trade usage

45
Q

Situations in which even a properly authorised agent might incur personal liability:

TU, NI*, CUS (NT).

A

negotiable instruments

46
Q

Situations in which even a properly authorised agent might incur personal liability:

TU, NI, CUS* (NT).

A

contracts under seal

47
Q

Situations in which even a properly authorised agent might incur personal liability:

TU, NI, CUS (NT*).

A

non trustee

48
Q

The only situation in which a principal whose ‘non agent’ acts without authority may sue or be sued on a contract.

A

When the principal ratifies the contract, thereby authorising the agent retrospectively.

49
Q

An ‘agent’ acting knowingly without authority may be liable for …

A

the tort of deceit.

50
Q

An ‘agent’ acting … without authority may be liable for the tort of deceit.

A

knowingly

51
Q

An ‘agent’ acting unknowingly without authority may be liable for …

A

breach of warranty of authority.

52
Q

An ‘agent’ acting … without authority may be liable for breach of warranty of authority.

A

unknowingly

53
Q

A partner’s authority no longer has effect …

A

once third parties have been informed of the fact.

54
Q

T/F: Ostensible or apparent authority can be deemed to exist as a result of the actions of “a person with actual authority.”

A

TRUE

this person is usually a principal, or board of directors e.t.c.

55
Q

An act done in the firm name by a person thereto authorised …

A

is binding on the firm and all the partners.

56
Q

T/F: Only a partner may bind their firm.

A

FALSE

An act e.t.c. done in the firm name by any person thereto authorised is binding on the firm and all the partners.

57
Q

Any act which binds the firm binds …

A

all of the partners.

58
Q

Under agency law, notwithstanding the few exeptions, only … have rights and obligations under a contract entered into by a properly authorised agent.

A

the principal and the third party

59
Q

T/F: The duties of an agent are limited to ONLY those explicitly appearing in the contract of authorisation.

A

FALSE

There are several duties implied by law, for example accountability and confidentiality.

60
Q

A principal and agent have a … relationship.

A

fiduciary

61
Q

Types of authority for an agent: AE*, AI, IU, O

A

actual express

62
Q

Types of authority for an agent: AE, AI*, IU, O

A

actual implied

63
Q

Types of authority for an agent: AE, AI, IU*, O

A

implied usual

64
Q

Types of authority for an agent: AE, AI, IU, O*

A

ostensible

65
Q

The type of authority which exists due to an agent’s office or position.

A

implied usual

66
Q

The type of authority which exists due to specific authorisation.

A

actual express

67
Q

The type of authority which exists due to the virtue of its being a natural consequence of specific authorisation.

A

actual implied

68
Q

The type of authority which exists due to the behaviour of a principal; normally that of being passive when an agent exceeds their actual express, implied or implied usual authority.

A

ostensible or apparent

69
Q

The type of agency which exists due to a pressing need for action, usually where an existing agency or contractual relationshp exists.

A

agency of necessity

70
Q

The type of agency which exists due to an after the fact decision by a principal to agree to be bound by a contract entered into by someone not authorised as agent.

A

ratification

ICAEW Law: QB2020 (11 decks)

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