Law of Agency

Question 1

“any person may become an agent, but no person who is not of the age of majority and sound mind can become an agent, to be responsible to his principal.”

Answer 1

Section 137 of the Contracts Act 1950

Question 2

This is an agent who has the principal’s unlimited authority to carry out contracts on behalf of the principal without recourse to the principal at every point in a transaction.

Answer 2

General agent.

Question 3

The basic feature of the agent is that the agent has possession of the goods before sale.

Answer 3

Factor

Question 4

An authority is said to be express when it is given by words spoken or written.

Answer 4

Section140 of the Contracts Act 1950

Question 5

The appointment is implied when the authority can be drawn from the circumstance of the case

Answer 5

Section140 of the Contracts Act 1950

Question 6

The supporting case for Implied appointment is _______________.

Answer 6

Summers v Solomon

Question 7

To rely on the agency by necessity the following conditions must be satisfied:

Answer 7

i. There must be an emergency, making it necessary for the agent to act as he did.
ii. It must be impossible to get instructions from the principal.
iii. The agent must have acted in good faith and in the interests of all the parties.

Question 8

The supporting case for agency of estoppel is ___________.

Answer 8

Soanes v London and South Western Railway Company

Question 9

Agency by Ratification is stated in Section ___________.

Answer 9

Section 149 Contracts Act 1950

Question 10

The supporting case for Agency by Ratification is _____________

Answer 10

Keighley Maxted and co. v Durant

Question 11

List 3 duties of an Agent to Principal

Answer 11

• An agent is bound to conduct the business of his principal according to the directions given by the principal
• A duty to discharge his duties with care and due diligence
• A duty to avoid conflict of interest
• Whatever amount received on behalf of the principal, must be paid to the principal.
• Agent cannot delegate his authority to another person.
• An agent also must not engage in self-dealing.

Question 12

Explain any 3 ways an agency can be terminated by operation of Law

Answer 12

i. Frustration-Contracts of the agency are subject to discharge by frustration just like any other contract.
ii. The death of either party
iii. The Insanity of either party
iv. Bankruptcy – the bankruptcy of the principal will end the agency agreement.