Chapter 7 Self-test questions

. Where an agent effects a contract between his principal and a third party, but is not authorized to do so, then a third party will be unable to ever sue on the contract.

True

False

. What is the ratio of Jordan v Norton (1838) 4 M&W 155?

Where an agent makes a contract on behalf of a disclosed principal, then the contract is between the principal and third party only.

Where a third party knows that an agent is acting outside the scope of his actual authority, then any contract between the principal and agent can be avoided by the principal.

Where the agent acts without authority, then the third party cannot sue the principal.

Where the agent acts within the scope of his actual authority, then if either the principal or third party breaches the contract, the innocent party can sue the party in breach.

. When can a principal sue or be sued on a negotiable instrument? Please select all that apply.

If he has signed it.

A principal can never be sued on a negotiable instrument.

If it is evidenced in writing.

If the principal has authorized another person to sign it and that person has signed it.

. A payment by the principal to the agent will discharge the liability between the principal and the third party.

True

False

. Where an agent enters into a contract with a third party on behalf of an undisclosed principal, then the undisclosed principal cannot sue, or be sued, on that contract.

True

False

. An undisclosed principal's ability to intervene on a contract is subject to a number of limitations and principles. Which of the following is not a valid limitation or principle?

Not only can the undisclosed principal intervene, but the agent can also sue, and be sued on the contract.

The undisclosed principal can only intervene if the agent intended to act on the principal's behalf.

Where a principal does intervene, then any defence that the third party has against the agent will also be available against the principal.

The undisclosed principal can only intervene if he ratifies the agent's actions.

The undisclosed principal can only intervene if the agent acted within his actual authority.

The terms of the contract may, expressly or impliedly, exclude the principal's ability to intervene.

. A third party who deals with the agent of an undisclosed principal can discharge his liability to the principal by settling with the agent.

True

False

. What was the ratio of Armstrong v Stokes (1872) LR 7 QB 598 (QB)?

An undisclosed principal can discharge his obligations to a third party by settling with the agent.

An undisclosed principal cannot settle with a third party if the third party wishes to deal with the agent.

A principal cannot be liable to a third party where the contract excludes the intervention of the principal.

If a principal does wish to settle with the agent, then the settlement must be in cash.

. A principal will not be vicariously liable for the acts of his agent if those acts are unauthorized.

True

False

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