Quiz ( Agency)

Question 1

What is Agency?

Answer 1

Agency is a relationship based on an express or implied agreement by which one person, the agent, is authorized to act under the control of the principal, in negotiating and making contracts with third persons.
An agency agreement need not be in writing. Just as any contract, it can be made orally, in writing or by conduct.

Question 2

Employees
& Independent Contractors

Answer 2

An employee is not hired to represent the employer in making contracts with third persons. It is possible, however, for the same person to be both an agent and an employee.

An independent contractor is bound by a contract to produce a certain result—for example, to build a house. The actual performance of the work is controlled by the contractor, not the owner.

An agent or employee differs from an independent contractor in that the principal or employer has the right to control the agent or employee, but not the contractor, in the performance of the work.

Question 3

Duties of an agentb

Answer 3

1) To carry out the principal’s instructions

2) To act with due care and skill

3) Owes a fiduciary duty

A)Conflict of interest
B)Bribes and secret profits