Deck 18: Agency

Question 1

The reason for the classification of agents is to determine the actual extent of an agent's authority.

Answer 1

True

Question 2

In what circumstances will Samson be an employer and David an independent contractor?

A)Samson is paying David to perform a task and David is subject to the control and direction of Samson.
B)David has authority to bind Samson to a contract with a third party.
C)Samson is paying David to perform a task but has no control over how David will complete the task.
D)David is claiming to be Samson's legal representative.

Answer 2

C

Question 3

Which of the following is an example of an agency that is created by express appointment?

A)Adam is entrusted with Peter's property and finds it necessary to do something with it in order to preserve it.
B)Peter retrospectively affirms the authority of Adam.
C)Adam and Peter become partners in a partnership.
D)Peter appoints Adam under a general power of attorney to carry out a particular transaction on his behalf.

Answer 3

D

Question 4

An agent who can do almost anything on behalf of the principal which the principal can do for themselves is known as:

A)a 'special' or 'limited' agent.
B)a 'universal' agent.
C)an 'independent' agent.
D)a 'general' agent.

Question 5

An agent who can only make a particular type of contract or carry out a particular transaction on behalf of the principal is known as:

A)a 'special' or 'limited' agent.
B)a 'universal' agent.
C)an 'independent' agent.
D)a 'general' agent.

Question 6

An agent who can make contracts of a class that are normal for this type of agency or do some act for the principal which is part of the agent's ordinary course of business is known as:

A)a 'special' or 'limited' agent.
B)a 'universal' agent.
C)an 'independent' agent.
D)a 'general' agent.

Question 7

Which of the following is an example of an agency created by ratification?

A)Adam is entrusted with Peter's property and finds it necessary to do something with it in order to preserve it.
B)Peter retrospectively affirms the authority of Adam.
C)Adam and Peter become partners in a partnership.
D)Peter appoints Adam under a general power of attorney to carry out a particular transaction on his behalf.

Question 8

A contract must exist between the agent and the third party as well as the agent and the principal for agency law to apply.

Question 9

In what circumstances will Adam be a principal and David an agent?

A)David has authority to bind Adam to a contract with a third party.
B)Adam is paying David to perform a task but has no control over how David will complete the task.
C)David is claiming to be Adam's legal representative.
D)Adam is paying Eve to perform a task to be carried out by David.

Question 10

In what circumstances will Peter be an employer and Paul an employee?

A)Paul is claiming to be Peter's legal representative.
B)Peter is paying Paul to perform a task and Paul is subject to the control and direction of Peter.
C)Peter is paying Paul to perform a task but has no control over how Paul will complete the task.
D)Paul has authority to bind Peter to a contract with a third party.

Question 11

Authority that is conferred by the principal either verbally or in writing is an example of:

A)implied actual authority.
B)express actual authority.
C)retrospective actual authority.
D)apparent or ostensible authority.

Question 12

Which of the following is an example of an agency created by necessity?

A)Adam is entrusted with Peter's property and finds it necessary to do something with it in order to preserve it.
B)Peter retrospectively affirms the authority of Adam.
C)Adam and Peter become partners in a partnership.
D)Peter appoints Adam under a general power of attorney to carry out a particular transaction on his behalf.

Question 13

Which of the following is NOT a condition that is needed in order to establish that a person has acted as an agent of necessity?

A)That there is a genuine emergency.
B)That a formal written agency agreement exists.
C)That the person is acting in the principal's best interests.
D)That it is impossible to obtain the principal's instructions.

Question 14

The law presumes that a spouse has authority to obtain credit for necessaries suitable to their lifestyle.

Question 15

Where a principal,by words or conduct,creates the appearance of an agency that is reality does not exist,this is an example of:

A)implied actual authority.
B)express actual authority.
C)retrospective actual authority.
D)apparent or ostensible authority.

Question 16

Ratification by a principal of an unauthorised act by an agent can bind the third party retrospectively.

Question 17

Authority that is inferred from the conduct of the parties is an example of:

A)implied actual authority.
B)express actual authority.
C)retrospective actual authority.
D)apparent or ostensible authority.

Question 18

In Bolton Partners v Lambert (1889)41 Ch D 295,the ratification of the unauthorised acceptance by an agent on behalf of Bolton Partners meant that:

A)a contract was formed on the date of the ratification.
B)no contract was formed.
C)a contract was formed on the date of the agent's acceptance.
D)Lambert was able to revoke his offer.

Question 19

An independent contractor can never create an agency relationship with the person who engages them.

Question 20

Which of the following is an example of an agency created by implication?

A)Adam is entrusted with Peter's property and finds it necessary to do something with it in order to preserve it.
B)Peter retrospectively affirms the authority of Adam.
C)Adam and Peter become partners in a partnership.
D)Peter appoints Adam under a general power of attorney to carry out a particular transaction on his behalf.

Question 21

Explain the meaning of 'agent of necessity' and give two examples.

Question 22

In which of the following cases did the court decide that the agent had breached their duty not to make secret profits?

A)Lunghi v Sinclair [1966] WAR 172.
B)Hewson v Sydney Stock Exchange (1967)87 WN (NSW)422.
C)Panorama Developments (Guildford)Ltd v Fidelis Furnishings Fabrics [1971] 3 WLR 440.
D)John McCann & Co.v Pow [1973] 1 AllER 129.

Question 23

In which of the following circumstances will delegation of an agent's authority NOT be permitted?

A)Where the agent's duties are purely administrative.
B)Where the agent determines that the delegation is in the best interests of the principal.
C)Where the delegation arises out of necessity.
D)Where the delegation is permitted by the principal either expressly or impliedly.

Question 24

Which of the following is a right that an agent does NOT have without express or implied agreement to the contrary?

A)The right to be reimbursed for authorised expenses.
B)The right to be remunerated.
C)The right to retain possession of the principal's goods until the agent has been paid.
D)The right to be indemnified against liabilities incurred while carrying out the principal's instructions.

Question 25

An agent must always act in person & never delegate.

Question 26

Agency is a contractual relationship.

Question 27

Why was the firm held liable in the case of: Lloyd v Grace,Smith & Co [1912] AC 716?

A)The agent's acts were inside the scope of the agent's authority.
B)The agent's acts were outside the scope of the agent's authority.
C)The agent's acts were approved by the principal.D0 The agent's acts were for the benefit of the principal.

Question 28

What do you think is the rationale behind the rule that an agent must act in person? Do you agree with this rationale?

Question 29

What constitutes a 'secret commission' received by an agent? Outline any remedies available to the principal as a consequence of receiving a secret commission.

Question 30

The decision in the case of: Tooth & Co v Laws (1888)9 LR (NSW)154 was based on the fact that:

A)the dealings of the secretary appeared to be within the scope of their authority even though they lacked actual authority.
B)the defendant's previous conduct in paying for the jewellery amounted to a representation of the agent's authority.
C)the defendant's failure to notify the suppliers of the sale of business prohibited him from denying that the purchasers were his agents.
D)buying and selling cars was a normal practice of that kind of business.

Question 31

Which of the following best describes an agent's right to payment?

A)An agent may be entitled to payment as well as indemnity and reimbursement.
B)An agent is never entitled to payment but will be entitled to either indemnity or reimbursement.
C)An agent may be entitled to payment and either indemnity or reimbursement.
D)An agent is never entitled to payment but will be entitled to indemnity and reimbursement.

Question 32

The notion of 'apparent authority' means that a principal may be liable for the acts of an agent who behaves contrary to the explicit instructions of the principal.Is this fair? Explain your answer.

Question 33

When an agent negotiates a contract between a principal and a third party,the agent acquires no rights or duties under the contract.

Question 34

The decision in Australia and New Zealand Bank Ltd v Ateliers de Constructions [1967] 1 AC 86 was that the bank had authority to negotiate the cheques payable to Ateliers into the agent's account.This is an example of:

A)ostensible authority.
B)express actual authority.
C)implied actual authority.
D)apparent authority.

Question 35

Agency is a fiduciary relationship.

Question 36

Which of the following is an exception to the rule that an agent will NOT be personally liable under a contract entered into with a third party?

A)Where the agent has executed a deed in their own name.
B)Where the agent is in breach of warranty of authority.
C)Where the agent has not disclosed to the third party that they are an agent.
D)All of the above.

Question 37

The parties may terminate an agency agreement by:

A)resignation by the agent.
B)mutual agreement.
C)revocation by the principal.
D)all of the above.

Question 38

In which of the following cases did the court decide that the agent had breached their duty to act in the principal's interests?

A)Lunghi v Sinclair [1966] WAR 172.
B)Hewson v Sydney Stock Exchange (1967)87 WN (NSW)422.
C)Panorama Developments (Guildford)Ltd v Fidelis Furnishings Fabrics [1971] 3 WLR 440.
D)John McCann & Co.v Pow [1973] 1 All ER 129.

Question 39

Which of the following is an example of termination of an agency by operation of law?

A)Performance of the agent's task.
B)Completion of a specific purpose or act.
C)Revocation of the agent's authority.
D)Acceptance of a secret commission by the agent.

Question 40

In which of the following cases did the court decide that the agent had breached their duty to act in person?

A)Lunghi v Sinclair [1966] WAR 172.
B)Hewson v Sydney Stock Exchange (1967)87 WN (NSW)422.
C)Panorama Developments (Guildford)Ltd v Fidelis Furnishings Fabrics [1971] 3 WLR 440.
D)John McCann & Co.v Pow [1973] 1 All ER 129.

Question 41

Describe how an agency relationship can be terminated.

Question 42

Which of the following is NOT an agent?

A)Stockbroker.
B)Real estate agent.
C)Partner.
D)Mercantile agent.

Question 43

An agent can sue for breach of contract if their authority is revoked without their consent.

Question 44

A broker is a general agent who acts for two principals.

Question 45

Death of one of the parties will terminate an agency agreement.

Question 46

A del credere agent is a general agent who buys and sells without having possession or control of the goods or their documents.

Question 47

Which of the following is NOT a correct statement about an auctioneer?

A)An auctioneer is an agent of the vendor but after the fall of the hammer becomes an agent of the purchaser.
B)An auctioneer owes a duty to the vendor to accept the highest bid.
C)An auctioneer is accountable to the vendor for the collection of the purchase price.
D)An auctioneer can sue for the purchase price in their own name.

Question 48

In the event of an agent's breach,rescission is a possible remedy for the principal.