Chapter 8 Self-test questions

. Where an agent effects a contract on behalf of a disclosed principal, then, generally, the agent cannot sue the third party, nor vice versa.

True

False

. Which of the following statements are correct? Please select all that apply.

Where the agent of a disclosed principal acts without authority, then the third party cannot sue the principal, unless the principal ratifies the agent's actions.

Where the agent has apparent authority only, then the principal will be liable to the third party.

Where the agent acts outside the scope of his actual authority, then he will be liable to the third party for breach of warranty of authority, unless the principal ratifies the agent's actions.

Where the agent has apparent authority only, then the principal can enforce the contract against the third party.

. Which one of the following statements is not true?

An agent who executes a deed in his own name will not be a party to that deed if he indicates that he is acting on behalf of another.

The courts will not presume that an agent is not party to a contract simply because he is described as an agent or some other similar description.

An agent who signs the contract in his own name without any qualification will be a party to the contract, unless other portions of the contract indicate a contrary intention.

Where the agent signs a contract and indicates that he is acting as agent, or on behalf of another, then it will be presumed that he is not party to the contract.

. Where the third party has the option of suing the principal or agent, then, if he obtains judgment against one party, he cannot obtain judgment against other. This principal is based on the doctrine of _______.

. A person who professes to act as agent, but is in fact acting on his own behalf, will be liable on a contract entered into with a third party.

True

False

. What principle did the court establish in Rayner v Grote (1846) 15 M&W 359?

An agent who purports to act on behalf of another person must disclose the identity of that other person in order for a binding contract to arise between that third party and the principal.

An agent who falsely claims to be acting on behalf of another can enforce that contract against the third party if the third party continues with the contract after becoming aware of the true situation.

An agent who acts for a principal that does not exist will be personally liable to the third party.

An agent who falsely claims to be acting on behalf of another will be permitted to enforce the contract against the third party if the identity of the principal is not of importance.

. What does s 51(1) of the Companies Act 2006 state?

A person who enters into a contract on behalf of a company that does not yet exist will be personally liable on that contract.

An agent who acts for a principal that is a company must be appointed in writing.

A principal that is a company can only ratify the acts of an agent once that company has been fully incorporated.

A subsidiary company is deemed to act as agent for its parent.

. Where an agent acts on behalf of a foreign principal, then the agent cannot establish privity of contract between the principal and a domestic third party.

True

False

. What is a warranty of authority?

A collateral contract that exists between the principal and third party, under which the principal warrants that his agent is acting within his authority.

A collateral contract that exists between the principal and agent, under which the agent warrants that he will not act outside the scope of his actual authority.

A collateral contract that exists between the agent and third party, under which the agent warrants that he has a certain level of authority.

A collateral contract that exists between the principal and agent, under which the principal warrants that he has the capacity to engage the agent.

. Which of the following statements are true? Please select all that apply.

If an agent repeats a representation made by his principal, and the principal knows the representation to be untrue, but the agent does not, then either the principal or agent can be liable under the tort of deceit.

Where an agent commits a tort, the third party will often be able to commence proceedings against the agent or principal.

In order for an agent to be liable under s 2(1) of the Misrepresentation Act 1967, he will need to be a party to the contract between the principal and third party.

An agent will only be liable to a third party for negligent misstatement if he owed that third party a duty of care.

An agent can be liable under the tort of conversion if he obtains goods from the principal, even if the agent does not realise that the principal was not the owner of the goods nor had a right to possession of them.

An agent who passes on a defamatory statement made by his principal will, along with the principal, be liable to the defamed person.

Quiz Content