03. STUDY MANUAL questions on Agency. Flashcards
T/F: a valid agency relationship can be created by law.
TRUE
An agency of necessity is so created.
T/F: a valid agency relationship can be created by ratification.
TRUE
T/F: a valid agency relationship can be created by consent between the parties.
TRUE
T/F: a valid agency relationship can be created by the agent holding themselves out as agent.
FALSE
‘holding out’ only exists where the PRINCIPAL holds someone out as agent.
The (agent / principal) has a duty not to retain benefit from the relationship.
agent
The (agent / principal) has a duty to pay agreed remuneration, even if no benefit has been derived from the relationship.
principal
The (principal / agent / both) have duties of confidentiality.
both
The purchasing manager of a building firm, whithout having express permission to make a particular purchase, nevertheless has the … authority to make a contract for the purchase of timer on behalf of her employer.
implied
Agency.
The relationship which exists wereby a party is brought into contract with third parties by another acting on their behalf.
The relationship which exists wereby a party is brought into contract with third parties by another acting on their behalf.
Agency.
Identify the four ways in which an agency can arise.
Mutual consent (express or implied).
Ratification.
Operation of law (agency of necessity).
Agency by estoppel (holding out by the principal).
T/F: a principal may, in certain circumstances, ratify the acts of an agent, which have retrospective effect.
TRUE
Ostensible authority.
The authority which the principal represents to other persons they have given to the agent.
The authority which the principal represents to other persons they have given to the agent.
Ostensible authority.
T/F: an agent may disobey the instructions of the principal if they believe disobedience to be in the best interests of the principal.
FALSE
The three types of authority that an agent might have.
Actual Express.
Actual Implied.
Ostensible or Apparent.
T/F: provided an agent has authority and is known to be an agent, they can never have any personal liability under the contract and only the princpial can be liable.
FALSE
A contrary intention may be express or implied.
Creation of agency: C* E R N
consent
Creation of agency: C E* R N
estoppel
Creation of agency: C E R N*
necessity
Creation of agency: C E R* N
ratification
Three types of authority: AE* AI OA
actual express
Three types of authority: AE AI* OA
actual implied (incidental and usual)
Three types of authority: AE AI OA*
ostensible or apparent
T/F: A person properly appointed to a position has the actual implied usual authority of that position.
TRUE
A person NOT properly appointed to a position but behaving as if they were, unchallenged, will potentially be deemed to be acting with …
ostensible or apparent authoritiy
‘unchallenged’ being the key word
T/F: When an agent enters into a contract with a third party on behalf of the principal, the agent must have full contractual capacity.
FALSE
only the principal need have full contractual capacity
T/F: An agent must be appointed in writing.
FALSE
Modern methods of communication make an agency …
of necessity unlikely to be deemed to exist.
T/F: A principal can ratify, even though they had no legal capacity at the time the contract was made, provided they have full legal capacity at the time of any purported ratification.
FALSE
a principal must have legal capacity at BOTH at the time the contract was made AND at the time of ratification.
T/F: A principal can ratify even if the agent had no authority at all to enter into the contract?
TRUE
ratification creates a valid agency relationship
T/F: The relationship between a principal and their agent is a fiduciary one.
TRUE
The relationship between a principal and their agent is a … one.
fiduciary
T/F: An agent only owes duties to a principal to the extent that such duties have been negotiated and included in the contract between them.
FALSE
there are also duties under common law and statute due to their fiduciary relationship
A C P O S P C and I R L
T/F: A person authorised to sell a car also has authority to advertise the car for sale.
TRUE
such authority is incidental to express authority
T/F: A person authorised to sell a car ‘for £10,000’ also has authority to reduce the price.
FALSE
A partner doing work outside the normal business of the firm, unchallenged by their fellow partners, …
will be deemed to have ostensible/apparent authority
A third party believing an agent to be acting on their own account …
may choose to sue the agent or the principal
If a third party believes an agent to be acting on their own account, the ‘unknown principal’ …
has the primary right to sue the third party
If a third party believes an agent to be acting on their own account, the agent …
has a right to sue the third party, but this is subordinate to the principal’s
If a third party believes an agent to be acting on their own account, the third party …
may choose to sue either the principal or the third party
T/F: If an ‘agent’ acts without authority the ‘principal’ has no liablity to the third party.
TRUE
T/F: If an ‘agent’ acts without authority the third party has no claim against the ‘principal.’
TRUE
If an ‘agent’ acts without authority the third party has a claim for …
the tort of deceit
If an ‘agent’ acts without authority the principal has a claim for …
breach of warranty of authority
