Question 1

A mercantile agent is an agent who:

Accepted Answer

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

Question 2

A del credere agent:

Accepted Answer

A del credere agent agrees to indemnify the principal in the event of non-performance by the third party. This means that the agent takes on additional responsibility for the transaction and provides an added layer of protection for the principal. Del credere agents are usually entitled to a higher commission than regular agents, as they are assuming greater risk.

Question 3

Authority by ratification exists if the principal:

Accepted Answer

Authority by ratification occurs when the principal authorises the agent's act retrospectively, meaning after the act has already been performed. Therefore, choice A is the correct answer. Choices B, C, and D do not fit the definition of authority by ratification.

Question 4

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

Accepted Answer

If an agent is appointed to engage in illegal acts on behalf of the principal, the agent's appointment is automatically terminated as the law doesn't allow agents to engage in illegal activities on behalf of their principal. Any contracts negotiated by the agent while engaging in illegal activities are considered void and unenforceable.

Question 5

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...

Question 6

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

Accepted Answer

Apparent authority is based on the reasonable appearance of authority that the principal creates through their actions and words to a third party, regardless of whether the agent actually has the authority from the principal to act. Therefore, even in the absence of actual authority, an agent may have apparent authority to act on behalf of the principal.

Question 7

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

Accepted Answer

The principal may still be liable for acts of the agent that are committed while the agent is acting within the scope of their apparent authority. This is because third parties might not be aware that the agency relationship has ended and could reasonably believe the agent still has the authority to act on behalf of the principal.

Question 8

A broker is:

Accepted Answer

A broker is an agent who is authorised to sell the principal's property without being in possession of the property. This means that the broker is authorized to act on behalf of the principal to find potential buyers and negotiate the sale of the property, but they do not physically hold or own the property themselves.

Question 9

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 10

An enduring power of attorney:

Accepted Answer

An enduring power of attorney continues even if the principal loses intellectual capacity, which is its defining feature. Therefore, options A, B, and D are incorrect.

Question 11

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 involve any representation of authority to act on behalf of a principal. Therefore, it does not satisfy the requirement for establishing a breach of warranty of authority on the part of an agent. The other options, (A), (C), and (D), all involve representations or reliance on representations of authority by the agent, making them potential requirements for establishing a breach of warranty of authority.

Question 12

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 event of TPP being destroyed by flood has frustrated the agency agreement between Felicity Featherstone and Giovanni, as the purpose of the agreement (to arrange cleaning contractors for TPP) has become impossible to fulfill. Therefore, the agreement is discharged by frustration.

Question 13

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 14

A 'special agent' is an agent with:

Accepted Answer

A special agent is granted limited authority to act on behalf of the principal, typically for a specific task or purpose.

Question 15

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 16

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 17

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

Accepted Answer

An enduring power of attorney is a type of power of attorney that remains valid even if the principal loses capacity. If the agent was appointed under the authority of an enduring power of attorney, the agency relationship would not be automatically terminated by the principal's loss of capacity. However, if the agent was appointed under a general power of attorney, the agency would be automatically terminated in the event of the principal's loss of capacity. Therefore, the correct answer is option C.

Question 18

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 19

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

If the agent did not have authority to act for the principal or if the agent told the third party that they were acting on their own behalf, the principal will not be able to enforce the contract with the third party. This is because the third party entered into the contract with the agent, believing that the agent was the principal. If the agent did not have authority or misled the third party, then the contract is not binding on the principal. The other options may be relevant in some cases, but they do not impact the principal's ability to enforce the contract in the same way.

Question 20

The legal term 'agent' means:

Accepted Answer

The legal term 'agent' refers to a person who is authorized to act on behalf of a principal, which means that the agent has the legal authority to enter into contracts and make decisions on behalf of the principal. This authority can be granted through a formal agreement or by implied authority. Options B, C, and D are not accurate definitions of the legal term 'agent'.

Quiz 10: Contract Law: Working With Agents