Chapter 18 Self-test questions

Agency
Which of the following are examples of agents:
i) Special agents.
ii) Commercial agents.
iii) Commission agents.
iv) Del credere agents.

The agent's role is to act on behalf of the _________.

The agent's role is to act on the principal's behalf in establishing contracts which will not be considered to bind the agent and the third party, but rather will bind the principal and the third party.

An agency agreement may NOT be created by:

As provided for under an EU Directive, a __________ agent is afforded greater protection (through statute) than exists under the common law.

A commission agent has the authority to buy and sell on the principal's behalf, but they are not authorized to establish privity of contract with the third party.

Which of the following is NOT a duty imposed on agents?

A ___ ________ agent binds the principal, but they are provided with an additional sum that guarantees that the agent will indemnify the principal in the event that the third party fails to pay money owed under the contract.

Agency agreements are formal arrangements that require complex legal formalities (through a system of registration) to be observed if they are to be validly established.

Which of the following rights apply to an agent:
i) Indemnity from the principal.
ii) Pay (expressly agreed or through implication).
iii) To maintain goods (in certain circumstances).
iv) To take property belonging to the principal where an agreed fee has not been paid.

________ authority, when expressed in words or writing, is an agreement between the principal and the agent as to the powers that the agent will have to bind the principal.

Actual authority in agency relationships is only effective where statutory requirements have been met.

The rights and obligations provided under the Commercial Agents (Council Directive) Regulations 1993 are restricted to which of the following?

__________ authority is applicable where the principal (or someone acting for them) has represented to the third party that the agent has the authority to act on his/her behalf.

Whereas express and implied authority derives from the agreement between the principal and agent, apparent authority is applicable where the principal (or someone acting for them) have represented to the third party that the agent has the authority to act on their behalf.

Authority through ___________ allows for the retrospective acceptance of a contract and it will enable the principal to all the rights and obligations provided under a contractual agreement.

Any contract entered into by the agent without the authority of the principal will not be allowed to bind the principal, rather it must bind the agent and the third party.

Where the agent acts in relation to __________, the courts may bind the principal in the actions of the agent even though he/she has no actual or apparent authority to act in the particular way. Examples of such agency have occurred in emergencies at sea or where perishable goods are involved.

Where the agent acts in relation to necessity (for example, protecting property owned by the principal), then the courts may bind the principal in the actions of the agent even though they have no actual or apparent authority to act in the particular way.

_________ duties are imposed on agents due to the nature of the relationship with the principal, and the authority the agent exercises for him/her. If a breach of the duty is discovered, the principal may seek to recover any secret profit made by the agent, and/or any bribe that has been paid. In such a situation the principal may seek damages for the fraud committed.

Agents are always able to delegate their duties insofar as they remain ultimately responsible to the principal for completion of the tasks.

Where the agent has identified themself as such, and established the contract on the principal's behalf, then the contract is between the principal and the third party, and the ______ has no liability.

If an agent, for example, disposes of the principal's goods as per their agreement, but in so doing they make a secret profit, insofar that the agent has obtained the price requested by the principal, they are entitled to keep this 'extra' amount as a bonus.

An agent who is owed money or some other unsatisfied claim from the principal may maintain _____ over the property until the debt is satisfied.

An agent is entitled to indemnity from the principal with regard to any liability or for the costs associated in acting for the principal (to have any expenses repaid), unless this is specifically excluded in the agreement.

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