Chapter 10: Appointment and Authority of Agents

Question 1

Give some examples of Agency Relationships?

Answer 1

1. A person engaged to buy or sell movable or immovable property.
2. A person engaged to collect rent from tenants.
3. A person employed to manage shop.

[Chapter 10 LO 1]

Question 2

Can a Minor/Unsound Mind become Agent?

Answer 2

Yes.
But if appointed, he will not be liable for exceeding his authority, or negligence or breach of duty.

[Chapter 10 LO 1]

Question 3

Can a Minor/Unsound Mind become Principal?

Answer 3

No.
But if appointed, Agent will be personally liable for all acts.

[Chapter 10 LO 1]

Question 4

Can agent exceed his Authority in case of “Emergency”?

Answer 4

Yes, if:
1. Real emergency.
2. Unable to contact principal.
3. Acted in the best interest of principal.

[Chapter 10 LO 2]

Question 5

Give some examples of Ostensible/Apparent Agency or Agency by Estopple?

Answer 5

1. **A person made representation **that another person is his agent, and third party made agreement with that person on the basis of representation.
2. Agent is terminated, but public notice is not given.

[Chapter 10 LO 2]

Question 6

Who is responsible in case of Agency by Estopple?

Answer 6

Principal is bound even if other person was not his agent.

[Chapter 10 LO 2]

Question 7

What is the legal position of Principal and Agent, if Agent exceeds his authority?

Answer 7

Position of Agent:
Agent is liable to compensate loss, unless this is** Emergency** or principal Ratifies it.

Position of Principal:
1. If third party knew agent’s authority, Principal is not liable to third party. [Agent will compensate Third party]
2. If third party did not know agent’s authority, Principal is liable to third party. [Agent will compensate Principal]

[Chapter 10 LO 2]