C4 - questions Flashcards
Andrea purchases 10 watercolour paintings from an artist, Ross, for her employer, the Earl of Somerset, even though he has told her not to buy any more watercolours on his behalf but to concentrate on pastels. When the artist learns this, he demands their return as he had no wish for his
work to hang in Andrea’s terraced home in Bridgwater. However, the Earl of Somerset had come to like them after seeing them on Andrea’s walls and refused the artist’s demand for their return, sending him a cheque instead.
Requirements
Does the Earl of Somerset’s action amount to ratification of the contract?
Yes A
No B
Is the artist able to insist on the return of the watercolour paintings?
Yes C
No D
A - ratification can be inferred from words or conduct (needs more than passive inactivity though)
D - the contract has been ratified
Ratification can only validate an agent’s past acts and will not endow any future authority.
True
False
True
Arthur worked for Lady Grey and part of his job was to buy plants, ornaments and furniture for the
gardens of her country manor house. When her son, Harry, was due to retire she advised Arthur that
Harry would be taking on his responsibilities. A few weeks later, Arthur ordered some very expensive
roses and marble statues from Lady Grey’s main supplier and collected the goods the next day for
his own garden. The invoice was delivered to Lady Grey.
Requirements
Is there an agency relationship between Arthur and Lady Grey in respect of the contract for the roses
and statues?
Yes A
No B
Is Lady Grey bound to settle the invoice?
Yes C
No
A - an agency by estoppel has arisen by virtue of the supplier relying on the continuing representation by Lady Grey that Arthur is her agent
C - she is estopped from denying the agency relationship - however she may be able to reclaim the money from Arthur
Bel has just terminated her appointment of Livvi, who has been her agent for the past six months. The
written contract of agency did not mention anything about remuneration and Bel relies on this when
she refuses to pay Livvi in respect of her services. She does, however, accept that she must reimburse
her for £5,000 expenses that she has paid along the way.
Requirements
Can Bel rely on the written contract to claim that no remuneration is payable to Livvi?
Yes A
No B
Is Livvi entitled to retain the goods belonging to Bel that she has in her possession until she pays her
the sums owed to her?
Yes C
No
B - in the absence of express provision, a reasonable amount of remuneration is payable
C - an agent has the right to exercise a lien over property of the principal pending payment of sums owed
Barnaby is a partner in Brown & Co, a dentists’ practice. He orders four filing cabinets, one for
reception and one for each of the surgeries, from Office Gear. The other two dentists in the practice
think that this is an unnecessary expense and ask Office Gear to cancel the order. Office Gear is not
prepared to do so and demands payment.
Requirement
Which of the following best describes the legal position as to whether or not Brown & Co is bound
by the contract?
A It is bound because the contract is within the implied usual authority of the dentist, Barnaby.
B It is bound because Office Gear knew that Barnaby was buying the cabinets for Brown & Co.
C It is not bound because Barnaby had authority to buy dentistry tools and equipment but not
office supplies.
D It is not bound because the majority of partners do not wish to buy the cabinets.
A - a partner has implied usual authority to do usual things that a partner might do. The purchase of
office supplies is likely to be considered a usual activity for most partnerships
Are the following statements true or false in connection with 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.
True A
False B
It is not necessary to show that the claimant’s loss was caused by their reliance on the representation.
True C
False
A true
D false - there must be a causal link between the third party’s loss and their reliance upon the representation
Roz works in the accounts department of Bizzy Lizzy, a successful florist’s business. The principal
owner of the business, Vincent, was due to visit a specialist rose grower on the Isles of Scilly but was
unable to go due to illness. Vincent asked Roz to go along instead. He telephoned the rose grower to
say that his buying partner would be taking his place. Roz ordered 500 roses for Bizzy Lizzy.
Requirement
Which of the following best describes the legal position?
A Roz had ostensible authority to order the roses.
B Roz had implied authority to order the roses.
C Roz had express authority to order the roses.
26 Law ICAEW 2023
D Roz had no authority to order the roses.
A - by calling her his ‘buying partner’, Vincent has given the impression that Roz was his agent and that
she had the authority to purchase goods on behalf of the company
Are the following statements true or false?
For an agency by estoppel to arise, there must be a pre-existing agency relationship between the
principal and the agent.
True A
False B
When an individual revokes the authority of their agent they should inform the third parties, who regularly deal with the agent, of the change in circumstances in order to prevent the former agent
having any continuing authority to act on their behalf.
True C
False D
B false - there is no such requirement
C true
Annabel is Phil’s agent. She enters into a contract with Tim, within her authority, expressly describing herself as an agent for Phil.
Requirements
Can Annabel be liable on this contract with Tim?
Yes A
No B
If Annabel enters into a contract, saying that she is acting as agent but without actually naming Phil as
her principal, does that mean that Phil will not be liable on the contract?
Yes C
No D
A yes - if it appears that the parties intended this to be the case, she may be liable
D no - it means that it is more likely that she will be personally liable but, again, it is subject to the intentions of the parties.
Ashley is Phyllis’s agent and enters into a contract for the purchase of a vintage car from Vince, as
instructed by Phyllis. Vince does not know that Ashley is buying the car for Phyllis, at the time of
entering into the contract, but discovers this to be the case one week later.
Requirements
If Vince then defaults on the sale, can Phyllis take action on the contract?
Yes A
No B
If Phyllis defaults on the purchase, can Vince take action on the contract?
Yes C
No D
Ashley = agent
Phyllis = principle
Vince = third party
A = either A or P can sue (A’s rights are subordinated to P’s rights)
C - T can sue either A or P (but not both)
Walter enters into a contract for the purchase of a barge from Barney. He is actually buying it for
Natalie, although Barney does not know that Walter is buying it for anybody else (not that it would
have made any difference to him). When the date for payment arrives, Walter is unable to pay for the
barge and tells Barney that he was actually buying it for Natalie anyway.
Requirements
Is the contract enforceable against Natalie?
Yes A
No B
Is the contract enforceable against Walter?
Yes C
No D
A C - however Barney can only enforce the contract against either Natalie or Walter
Martha tells John that she wants to buy one of his horse sculptures on behalf of her grandmother,
Lady Reynolds. In fact, Lady Reynolds has not asked her to do so. Three months later, John contacts
Lady Reynolds to say that he has completed a bronze stallion and it is ready for collection on the
payment of £10,000. Lady Reynolds denies all knowledge of it and refuses to pay.
Requirements
Can John sue Lady Reynolds on the contract?
Yes A
No B
Can John sue Martha under the tort of deceit?
Yes C
No D
B - not in the absence of ratification by her
C
Dennis was a partner in Doolittle Solicitors. He retires from the partnership and the firm’s existing
clients and suppliers are informed of this fact; the firm amends its stationery so that Dennis’s name no longer appears on it. A short time later, Dennis orders goods using old stationery which still has
his name on it and asks for the bill to be sent to Doolittle Solicitors.
Requirement
Which of the following statements is correct?
A There is a binding contract between Dennis and the firm which supplied the goods.
B No binding contract has been created between the supplier and Doolittle Solicitors because
Dennis was not authorised to act on behalf of the firm.
C There is a binding contract between Doolittle Solicitors and the firm which supplied the goods.
D No binding contract has been created because the partnership shown on the stationery had
ceased to exist.
A
Kit and Lin are partners in a takeaway pizza business. One of their employees, Jeff, decides to try to
improve the business’s profits by setting up a parcel delivery operation, using the same business
name, that uses the pizza delivery vehicles to deliver the parcels. Kit and Lin do not prevent Jeff
doing this and are happy with the extra money the parcel delivery service is making.
Which type of authority does Jeff have in regard to the parcel delivery service?
A Actual express authority
B Implied usual authority
C Ostensible authority
D Actual implied authority
C - By not preventing Jeff from running the parcel delivery service, Kit and Lin have provided ostensible
authority to Jeff. Their acceptance of his actions represents to third parties whom Jeff deals with that
he has authority to run the service
Alice, acting as Petra’s agent, contracts with Toni to purchase Toni’s car.
Requirement
Under agency law, who may sue and be sued on the contract?
A Alice and Toni
B Petra and Toni
C Alice and Petra
D Alice, Toni and Petra
B - Under agency law, Alice drops out of the picture. The contract is between Petra and Toni.
