Question 1

An agent may have apparent authority to act on behalf of the principal:

Accepted Answer

Apparent authority arises when a principal's actions lead a third party to reasonably believe that an agent has authority, even if the agent lacks actual authority.

Question 2

A broker is:

Accepted Answer

A broker acts as an intermediary who is authorized to sell or lease the principal's property without taking possession of it.

Question 3

Complete loss of intellectual/legal capacity on the part of the principal will:

Accepted Answer

An enduring power of attorney remains effective even if the principal loses intellectual or legal capacity, thus allowing the agent to continue acting on behalf of the principal.

Question 4

If an agent is appointed to engage in illegal acts on behalf of the principal:

Accepted Answer

An agent's appointment to engage in illegal acts is automatically terminated because such acts are void and unenforceable by law.

Question 5

A 'del credere' agent:

Accepted Answer

A 'del credere' agent guarantees the principal against losses from the buyer's default, agreeing to indemnify the principal if the third party fails to perform.

Question 6

The legal term 'agent' means:

Accepted Answer

An agent is someone who is authorized to act on behalf of a principal, typically in business or legal matters, and this is the defining characteristic of an agency relationship.

Question 7

The legal term 'principal' means:

Accepted Answer

In legal terms, a 'principal' is a person who is represented by an agent and is legally responsible for the actions of that agent.

Question 8

Once a relationship of agency has been brought to an end:

Accepted Answer

Even after the termination of an agency relationship, the principal may still be liable for acts of the agent if the agent acts within the scope of their apparent authority, as third parties may not be aware that the agency has ended.

Question 9

Where a third party contracts with an undisclosed principal via an agent, the principal will still be able to enforce the contract with the third party unless:

Accepted Answer

The principal can enforce the contract unless the agent lacked authority or misrepresented their role.

Question 10

Felicity Featherstone is appointed by Giovanni, the owner of the restaurant The Purple Palace ('TPP'), to arrange cleaning contractors to clean TPP.Before she has had a chance to take any step toward hiring cleaners, TPP is totally destroyed by flood.What is the effect, in law, of this event on the agency agreement between Felicity Featherstone and Giovanni?

Accepted Answer

The destruction of TPP by flood has made it impossible for Felicity Featherstone to carry out her duties as an agent. This frustration of purpose would make the agency agreement void and discharge both parties from their obligations.

Question 11

Implied authority of a company director to act on behalf of the company:

Accepted Answer

Implied authority generally increases with the seniority of the director's position, as higher-ranking directors are typically assumed to have broader powers to act on behalf of the company.

Question 12

P enters into a contract with A according to which A is to deliver a crate of P's watermelons to a customer in another State by a certain date.The delivery is delayed by flooding, and rather than allow the watermelons to perish, A sells them to local buyers along the way.P sues A for compensation.Could A successfully argue that they had the authority to sell the watermelons on P's behalf?

Accepted Answer

The answer of P enters into a contract with A...

Question 13

Which of the following is not a requirement for establishing a breach of warranty of authority on the part of an agent?

Accepted Answer

Claiming to make a contract on one's own behalf does not establish a breach of warranty of authority. The other options, A, C, and D, are requirements for establishing a breach of warranty of authority.

Question 14

Authority by ratification exists if the principal:

Accepted Answer

Authority by ratification occurs when a principal approves an agent's act after it has been performed, thereby giving it retrospective authorization.

Question 15

If an agent appointed under a power of attorney acts on behalf of a principal after the principal dies but before the agent has been informed of the death, power of attorney legislation in each state provides that:

Accepted Answer

The agent's actions will bind the estate of the principal if the agent was unaware of the principal's death at the time of acting.

Question 16

An enduring power of attorney:

Accepted Answer

An enduring power of attorney is designed to continue to be effective even if the principal loses intellectual capacity, allowing the appointed attorney to make decisions on their behalf.

Question 17

A 'special agent' is an agent with:

Accepted Answer

A 'special agent' is an agent with limited authority to act on behalf of the principal, typically for a specific task or transaction.

Question 18

A mercantile agent is an agent who:

Accepted Answer

The answer of A mercantile agent is an agent who:
...

Question 19

P, the manager of a DVD store, tells A, a sales person, not to sell a particular DVD because it has been set aside for another customer.A accidentally sells the DVD to T.Can P recover the DVD from T?

Accepted Answer

A acted with apparent authority, meaning to T, it appeared that A had the authority to sell the DVD. In such cases, the transaction is typically considered valid, and the store cannot recover the DVD from T based on A's apparent authority to sell it.

Question 20

A is engaged as the personal assistant for P, a famous celebrity.A regularly hires luxury cars on behalf of P, for which P regularly pays.One weekend, without P's permission, A hires a Porsche in P's name for A's own personal use.Is P entitled to refuse to pay for the hiring of the Porsche?

Accepted Answer

The answer of A is engaged as the personal assistant...

Quiz 10: Contract Law 4: Working With Agents