Law of Agency

Question 1

_______________ defines agent as a person employed to do any act for another or to represent another in dealings with third persons.

Answer 1

Section 135 of Contracts Act 1950

Question 2

_____________ provides “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 2

Section 137 of the Contracts Act 1950

Question 3

This is an agent who has the principal’s unlimited authority to carry out contracts on behalf of the principal.

Answer 3

General agent

Question 4

This agent undertakes to guarantee the goods or indemnify the principal for any losses arising from the agency transaction.

Answer 4

Del Credere agent

Question 5

The agent has possession of the goods before sale.

Answer 5

Factor

Question 6

_____________ provides ‘an authority is said to be express when it is given by words spoken or written.’

Answer 6

S.140 of the Contracts Act 1950

Question 7

_____________ provides the appointment is implied when the authority can be drawn from the circumstance of the case.

Answer 7

S.140 of the Contracts Act 1950

Question 8

The supporting case for implied appointment is ____________.

Answer 8

Summers v Solomon

Question 9

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

Answer 9

i. There must be an emergency.
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 10

The supporting case for agency by necessity are _________.

Answer 10

i. Great Northern Railway Co. vs. Swaffield
ii. Sachs v. Miklos

Question 11

The supporting case for agency of estoppel is ________.

Answer 11

Soanes v London and South Western Railway Company

Question 12

Agency by ratification can arise in any one of these situations:

Answer 12

i. When an agent exceeds his authority
ii. When a person is not an agent but acts as if he has authority to act as an agent.

Question 13

The supporting statute and case for agency by ratification are _____.

Answer 13

S149 Contracts Act 1950 and Keighley Maxted and co. v Durant.

Question 14

List 3 duties of an agent to principal

Answer 14

• 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 15

An agent is bound to conduct the business of his principal according to the directions given by the principal.

Answer 15

Section 164 of Contracts Act 1950

Question 16

Agency can be terminated by _________ and _________.

Answer 16

parties and operation of law.

Question 17

How can an agency be terminated by operation of law?

Answer 17

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.

Question 18

Case law for duties of a principal to agent

Answer 18

Luxor (Eastbourne) v Cooper

Question 19

Mahesan v Malaysian Government Officers Co-Operative Housing Society Ltd the Court held ________.

Answer 19

The respondent could recover the bribe and the amount of the actual loss suffered.

Question 20

The supporting statute for agency of necessity _______.

Answer 20

S. 142 Contracts Act 1950