Podcast
Questions and Answers
What is the primary consequence if an agent acts in his own name during a transaction?
What is the primary consequence if an agent acts in his own name during a transaction?
- The agent can sue the principal for damages.
- The principal has no right of action against the third party. (correct)
- The principal has recourse against the agent.
- The third party can directly pursue the principal.
What must an agent do if the principal dies and there is unfinished business?
What must an agent do if the principal dies and there is unfinished business?
- Wait for the principal's heir to decide.
- Completely terminate any transactions.
- Transfer the business to another agent.
- Continue the business to avoid delay. (correct)
What standard of care is the agent required to follow when an agency is declined?
What standard of care is the agent required to follow when an agency is declined?
- Standard of an expert in the field.
- No specific standard is required.
- Standard of a good father of a family. (correct)
- Strict liability for any damages.
Under what condition must an agent advance necessary funds?
Under what condition must an agent advance necessary funds?
What should an agent do if there are no specific instructions from the principal?
What should an agent do if there are no specific instructions from the principal?
What is the agent liable for if he prefers his own interests over the principal's?
What is the agent liable for if he prefers his own interests over the principal's?
What is required of an agent regarding the accounts of their transactions?
What is required of an agent regarding the accounts of their transactions?
Which action is prohibited for an agent who has the authority to lend money?
Which action is prohibited for an agent who has the authority to lend money?
Which circumstance does not cause the extinguishment of agency?
Which circumstance does not cause the extinguishment of agency?
What happens to an agency if the principal manages the business directly?
What happens to an agency if the principal manages the business directly?
What condition does not allow for the revocation of agency?
What condition does not allow for the revocation of agency?
When does revocation of an agency not affect third parties?
When does revocation of an agency not affect third parties?
What is required for the agent to withdraw from the agency?
What is required for the agent to withdraw from the agency?
When may the principal revoke the agency?
When may the principal revoke the agency?
Which of the following statements about agency revocation is false?
Which of the following statements about agency revocation is false?
What must happen for a third person to not raise the issue that an agent exceeded his powers?
What must happen for a third person to not raise the issue that an agent exceeded his powers?
What is one of the necessary conditions for an agent who withdraws to avoid liability?
What is one of the necessary conditions for an agent who withdraws to avoid liability?
Which of the following is true about a third person requiring the agent to present a power of attorney?
Which of the following is true about a third person requiring the agent to present a power of attorney?
What responsibility does the commission agent have once he receives goods?
What responsibility does the commission agent have once he receives goods?
How should a commission agent handle goods belonging to different owners?
How should a commission agent handle goods belonging to different owners?
What is the consequence if a commission agent sells on credit without consent?
What is the consequence if a commission agent sells on credit without consent?
What must a commission agent do if he sells on credit with the principal's authority?
What must a commission agent do if he sells on credit with the principal's authority?
What happens if a commission agent receives an additional guarantee commission?
What happens if a commission agent receives an additional guarantee commission?
What is the commission agent liable for if he does not collect the credits on time?
What is the commission agent liable for if he does not collect the credits on time?
What is the responsibility of an agent who appoints a substitute without having the power to do so?
What is the responsibility of an agent who appoints a substitute without having the power to do so?
When an agent contracts in the name of the principal while exceeding his authority, under what condition is the contract void?
When an agent contracts in the name of the principal while exceeding his authority, under what condition is the contract void?
In the absence of an express stipulation, how is the responsibility shared among multiple agents?
In the absence of an express stipulation, how is the responsibility shared among multiple agents?
How does an agent incur personal liability when contracting on behalf of the principal?
How does an agent incur personal liability when contracting on behalf of the principal?
What must the principal demonstrate to bring action against a substituted agent?
What must the principal demonstrate to bring action against a substituted agent?
What is the consequence for an agent who uses funds from the principal for personal use?
What is the consequence for an agent who uses funds from the principal for personal use?
What happens if an agent acts according to the principal's orders?
What happens if an agent acts according to the principal's orders?
What is required for an agent to be held liable when their fellow agents exceed their authority?
What is required for an agent to be held liable when their fellow agents exceed their authority?
Under what condition is the principal bound by the actions of an agent who has exceeded his power?
Under what condition is the principal bound by the actions of an agent who has exceeded his power?
What is the principal required to do if the agent requests necessary funds for executing the agency?
What is the principal required to do if the agent requests necessary funds for executing the agency?
In which scenario is the principal not liable for the expenses incurred by the agent?
In which scenario is the principal not liable for the expenses incurred by the agent?
What happens if two or more individuals appoint the same agent for a transaction?
What happens if two or more individuals appoint the same agent for a transaction?
What can an agent do if he is owed reimbursement from the principal?
What can an agent do if he is owed reimbursement from the principal?
Which of the following is true regarding an agent acting in bad faith?
Which of the following is true regarding an agent acting in bad faith?
If an agent acts contrary to the principal's instructions, under what condition can the principal still be liable for expenses?
If an agent acts contrary to the principal's instructions, under what condition can the principal still be liable for expenses?
Which statement about the indemnification of the agent by the principal is correct?
Which statement about the indemnification of the agent by the principal is correct?
Study Notes
Scope of Agency
- When an agent acts in their own name, only the agent is bound to third parties; the principal has no recourse against these parties unless the contract involves the principal's property.
- Provisions regarding the actions between principal and agent remain unaffected by this rule.
Agent's Obligations
- An agent is required to fulfill the agency faithfully and is liable for damages due to non-performance.
- Upon the principal's death, the agent must continue pending business to prevent jeopardizing interests.
Agency and Diligence
- If an individual declines an agency, they must exercise the diligence of a good father of a family in safeguarding forwarded goods until a new agent is appointed or the owner retrieves them.
Financial Responsibilities
- An agent required to advance funds must do so unless the principal is insolvent.
- The agent must act according to the principal’s instructions, applying good judgment if instructions are absent.
Conflict of Interest
- An agent must refrain from carrying out actions that would evidently damage the principal.
- If an agent prioritizes their interests over the principal's, they are liable for resulting damages.
Borrowing and Lending
- An authorized agent can borrow funds but must not lend without the principal's consent.
- Agents are required to keep separate accounts of their transactions and deliver everything received on behalf of the principal.
Substitution and Accountability
- Agents may appoint substitutes unless explicitly prohibited; responsibility lies with the agent for actions taken by any appointed substitute.
- In cases of improper appointment of a substitute, the principal may take action against both the agent and the substitute.
Solidarity Among Agents
- Unless expressly stated, multiple agents are not jointly liable for agency obligations. If solidarity is established, agents share responsibility for any non-fulfillment of duties.
Financial Liabilities of Agents
- Any funds used by the agent for personal purposes are subject to interest from the date of use.
- Agents are not personally liable to contracting parties unless they exceed authority without notifying them.
Principal's Liability
- A principal is bound by contracts made by the agent within designated authority, even if the authority is exceeded in some respects.
- The principal must advance necessary funds requested by the agent, reimbursing even if the venture was unsuccessful.
Termination of Agency
- Agency can be terminated by revocation, withdrawal of the agent, or various other circumstances, including death or insolvency of involved parties.
- A principal retains the right to revoke an agency at will and must notify the agent to return any documentation.
Effects of Revocation
- Revocation does not affect contracts made with specific persons unless they are notified.
- A general agency can be revoked when a specific power is granted to a different agent for a specific task.
Conditions and Restrictions on Revocation
- An agency cannot be revoked if it pertains to an existing bilateral contract or a management role that is unjustly terminated.
- The agent may withdraw from the agency with notice but must compensate for any damages caused unless withdrawal is due to unavoidable circumstances.
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Description
This quiz covers the fundamental principles of agency law, focusing on the rights and obligations of agents and principals when contracts are made in the agent's name. Understand the implications of actions taken by agents and the relationships between them and their principals. Perfect for law students and those interested in legal studies.