Chapter 6 Self-test questions

. Identify which of the following are not fiduciary duties of an agent. Please select all that apply.

Duty to account

Duty not to profit from position

Duty not to delegate

Duty to avoid conflicts of interest

Duty to perform contractual undertakings

Duty to obey instructions

Duty to act with reasonable skill and care

Duty not to accept bribes

. In cases involving a unilateral contract of agency, the agent will not be under a duty to perform his contractual undertakings.

True

False

. In relation to the agent's duty to obey instructions, which of the following statements are true? Please select all that apply.

A contractual agent who does not obey his principal's instructions can be liable for breach of contract.

A gratuitous agent can be liable if, in obeying the instructions of his principal, he acts outside of his authority.

The duty to obey the principal's instructions will not be breached if the agent can prove that his actions were reasonable, or that the principal's instructions were unwise.

An agent will not breach the duty to obey instructions if he refuses to engage in acts that would result in the creation of a void contract.

All agents are under a duty to obey the instructions of their principal.

An agent is not required to obey instructions that would result in a breach of rules of professional conduct.

. Where the principal's instructions are ambiguous, then the agent must not act until he has sought clarification from his principal.

True

False

. If an agent wrongfully delegates his authority, then several consequences can follow. Identify which of the following could result from a wrongful delegation of authority.

The contract of agency between the principal will be automatically terminated.

The agent will have acted in breach of duty and will be liable for all obligations arising under the transaction.

The principal will not be obliged to pay the sub-agent.

The actions of the sub-agent will not bind the principal.

The sub-agent will have a lien over the principal's goods.

There will not be privity between the principal and the sub-agent.

. What standard of care is expected of a gratuitous agent?

To exercise such care as the agent believes appropriate.

To exercise such care as the principal requires.

To exercise such care as is reasonable in the circumstances.

Gratuitous agents need not exhibit any standard of care as they have no obligation to act.

. An agent is not permitted, under any circumstances, to allow his own interests to conflict with those of his principal.

True

False

. A payment made by a third party to an agent without the principal's consent will amount to a bribe, irrespective of whether the payment influenced the agent or whether it was given or received dishonestly.

True

False

. Which one of the following statements regarding the duties of an agent is not true?

If an agent appoints a sub-agent, that sub-agent is not normally regarded as an agent of the principal.

An agent cannot accept commission from both parties to a transaction without his principals' consent.

Where an agent's interests conflict with those of his principal, he must disclose the conflict.

The agent is under a duty to keep his own property separate from that of his principal.

A secret profit derived from a third party constitutes a bribe, irrespective of the agent's motives.

An agent who is a professional is required to display such skill as may reasonably be expected from a member of his profession.

An agent can only disobey his principal's instructions if he honestly believes that disobeying those instructions is in his principal's best interests.

A gratuitous agent is not under a duty to act.

. All agents have the right to remuneration for the work they carry out for their principal.

True

False

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