chapter10

Question 1

Who can be Agent or Principal

Answer 1

Any person can be Principal (except Minor/
Unsound Mind)
Any person can be agent. If minor –> he is not
liable in case of negligence or exceeding authority.
Consideration is not necessary in an agency
agreement

Question 2

Examples of Agency Relationships:

Answer 2

• A person appointed to sell a property.
• A person appointed to collect rent.
• Employees/Managers in a shop.

Rule of Law: Acts of agent are considered acts of
Principal

Question 3

Express Authority

Answer 3

:

Authority given by words.

Question 4

.

Implied Authority:

Answer 4

Authority assumed in circumstances

Question 5

Authority in Emergency

Answer 5

Conditions to exercise authority in emergency:

1. Real emergency.
2. Unable to obtain instructions.
3. Acted in best interest of principal

Question 6

Ostensible/Apparent Agency: (in Agency by Estoppel)

Answer 6

A person (Principal) is liable for acts of other person (Agent) if:
He made representation that other person is his Agent, and
third party contracted with agent.
He terminated agent, but did not give public notice.

Question 7

Legal Position if Agent exceeds its Authority

Answer 7

If an agent exceeds his authority, Principal is liable for his acts if:
1. Principal ratifies it, or
2. It is a case of emergency, or
3. Third party did not know actual authority.
(Important for case studies. Same rule applies in Partnership)