Chapter 4 - New Questions Flashcards
In the UK, can a minor act as an agent?
Yes, a minor can act as an agent and bring about contracts for others.
What condition must be met for an act to be ratified by a principal?
The agent must have made it clear that they were acting on behalf of the principal.
If an agent sells a principal’s car without authorization and the principal later ratifies the sale, what can the principal do if the buyer fails to complete the purchase?
The agent can sue the buyer for breach of contract.
What does it mean that ratification ‘relates back’ to the date of the agent’s original act?
Ratification makes the original act valid as of the date it was done.
Which of the following acts cannot be ratified under the doctrine of ratification?
An act that is void or illegal.
What is the legal implication if an agent, acting on behalf of the insurer, fails to disclose material information?
The insurer is assumed to know the true facts and cannot avoid the policy.
Which of the following situations might confirm that an agent is acting for the consumer under CIDRA 2012?
The agent undertakes to give impartial advice to the consumer.
In the case of North & South Trust Co. v. Berkeley (1970), the broker was considered an agent of whom during the claim settlement negotiation?
The insurer.
If a broker obtains insurance coverage that does not meet the insured’s instructions, what is the broker’s duty?
To inform the insured immediately if full coverage as requested cannot be obtained.
In the context of insurance, who is the ‘producing broker’ in the relationship between an overseas broker and a London broker?
The overseas broker who has a direct agency agreement with the insured.
Who is held liable to the insured if the placing broker in the London market is negligent?
The producing broker.
What type of liability does the producing broker hold if the placing broker is negligent?
Direct liability to the insured.
What is the primary basis of an agent’s relationship with their principal?
Fiduciary duties, including good faith
In which field is specific disclosure of commission often required by law?
Life insurance
Under the Marine Insurance Act 1906, who is personally liable for the payment of a premium in marine insurance?
The broker
In what situation can the principal sue the agent in tort?
If the agent refuses to return the principal’s property.
What can the principal sue for if the agent fails to disclose full financial details of their agency dealings?
Sue for an account.
According to the Insurance Act 2015, what is the insured assumed to know if they are an individual?
What their agents responsible for arranging insurance know.
What is commonly done in an insurance agency or broking firm regarding commission and fees?
The agent or broker often returns the commission to the insurer and charges a fee, with the insured ultimately paying the agent.
What are the two types of lien?
Particular lien and general lien
What does implied actual authority allow an agent to do?
Act beyond the principal’s instructions if necessary for the agent’s personal gain.
In what situation would an agent have no express actual authority but only implied actual authority?
When the agency is created by implied agreement.
What should a principal do to end both the actual and apparent authority of an agent?
Inform third parties who have previously dealt with the agent.
Which of the following is an exception where an agent might still be liable when acting for a disclosed principal?
The agent signs a deed.
What happens if a principal owes money to a third party but pays the agent, and the agent does not pass on the payment?
The principal is still liable to the third party.
If an agent becomes insane, under what conditions does the agency end?
The agency ends if the agent is unable to carry out their duties.
What is an example of frustration in an agency contract?
The property (e.g., a house) to be sold by the agent is destroyed.
What are the consequences for the principal and agent when an agency is terminated?
Vested rights like earned commission or indemnity for past expenses remain.
How does termination of an agency affect the third party dealing with the agent?
The agent’s apparent authority may still bind the principal until the third party is notified.
