Agency Law Overview
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Questions and Answers

What consequence does a buyer face if they cancel a transaction after providing a deposit?

  • They forfeit the deposit as compensation to the seller. (correct)
  • They must pay an additional fee except for the deposit.
  • They recover the deposit in full.
  • They can reschedule the sale without penalty.

    • In a hire-purchase contract, who assumes the obligation to purchase the goods?

  • There is no obligation to purchase for the hirer. (correct)
  • Both the hirer and the owner are obligated.
  • Only the bank is obligated to purchase the goods.
  • Only the hirer assumes the obligation.

    • Which term describes when the seller ships goods to a designated port and loads them onto the buyer's freight carrier?

  • CIF (Cost, Insurance, and Freight)
  • DDA (Delivery Duty Paid)
  • FOB (Free on Board) (correct)
  • EXP (Export Delivery)

    • What must the seller do if they cancel the transaction after receiving the deposit?

    <p>Return double the deposit to the buyer.</p> Signup and view all the answers

    Which of the following is NOT a type of negotiable instrument under Egyptian commercial law?

    <p>Letter of Credit</p> Signup and view all the answers

    Which party in a bill of exchange acts as a guarantor for payment?

    <p>The drawer</p> Signup and view all the answers

    What is the role of the deposit in a contract of sale?

    <p>It demonstrates the buyer’s intent to purchase.</p> Signup and view all the answers

    Which of the following is a key specification of a bill of exchange?

    <p>It contains the issue date and the due date.</p> Signup and view all the answers

    Who is deemed liable to make a payment if the drawee defaults?

    <p>Both the drawer and payee</p> Signup and view all the answers

    What is the primary function of a crossed cheque?

    <p>It indicates funds must be deposited into the payee’s account.</p> Signup and view all the answers

    What must be included when a payee endorses a bill of exchange?

    <p>The endorsement date and first payee’s signature</p> Signup and view all the answers

    What characterizes a promissory note?

    <p>It is a promise to pay a specific amount to another party.</p> Signup and view all the answers

    What happens when a cheque is issued without sufficient balance?

    <p>The drawer may face legal charges.</p> Signup and view all the answers

    Which party writes all the details on a cheque?

    <p>The drawer</p> Signup and view all the answers

    In what context is an endorsement used regarding a bill of exchange?

    <p>To transfer rights to another payee.</p> Signup and view all the answers

    What is the role of the drawee in a cheque transaction?

    <p>Pays the monetary value of the cheque.</p> Signup and view all the answers

    What is the primary role of an Agent in an agency relationship?

    <p>To act on behalf of the Principal in legal matters</p> Signup and view all the answers

    Which of the following is NOT a key element of an agency relationship?

    <p>The Agent receiving immediate compensation</p> Signup and view all the answers

    What must both the Principal and Agent possess to create a valid agency relationship?

    <p>Legal age and sound mind</p> Signup and view all the answers

    Why is agency considered important in business law?

    <p>It allows for representation by specialized agents</p> Signup and view all the answers

    In what situation can an Agent NOT claim a commission?

    <p>The Agent disobeys the Principal's instructions</p> Signup and view all the answers

    What occurs if an Agent completes a task successfully?

    <p>A new agency contract is created with a third party</p> Signup and view all the answers

    What is a potential consequence of an Agent’s wrongful acts during agency duties?

    <p>The Principal may be held vicariously liable</p> Signup and view all the answers

    Which of the following statements about delegated authority in an agency is true?

    <p>The Principal remains liable for the Agent's actions</p> Signup and view all the answers

    What is one consequence if a principal notifies only the agent of an agency's termination?

    <p>The principal remains liable for the agent's actions toward unaware third parties.</p> Signup and view all the answers

    Which of the following is NOT a way to terminate an agency by operation of law?

    <p>Mutual agreement of the parties</p> Signup and view all the answers

    In the case of an undisclosed principal, who has the right to choose to sue the agent or the principal?

    <p>The third party</p> Signup and view all the answers

    What does a Contract of Sale primarily involve?

    <p>Transferring ownership of goods for monetary payment</p> Signup and view all the answers

    What type of items qualify as 'Emblements' in a Contract of Sale?

    <p>Crops cultivated by human effort</p> Signup and view all the answers

    Which scenario allows an agent to retain an irrevocable authority?

    <p>When the agent has a financial investment prior to agency establishment</p> Signup and view all the answers

    Which of the following describes 'Things in action' in a Contract of Sale?

    <p>Intangible assets such as shares and intellectual property</p> Signup and view all the answers

    What must happen for an agency to be legally terminated by mutual consent?

    <p>Both the principal and agent must agree.</p> Signup and view all the answers

    What recourse does an agent have if they act negligently or exceed their authority?

    <p>They can recover that amount from the principal.</p> Signup and view all the answers

    Under what condition is an agent still entitled to commission?

    <p>If the principal's actions prevent the task from being fulfilled.</p> Signup and view all the answers

    What is a key characteristic of an agent's right to lien?

    <p>They can retain possession until debts owed to them are settled.</p> Signup and view all the answers

    How is a principal considered disclosed?

    <p>When the agent reveals they are acting on behalf of the principal.</p> Signup and view all the answers

    What legal effect occurs when an agent signs a contract as an agent?

    <p>The agent drops out of the scene once the contract is made.</p> Signup and view all the answers

    What does the agent have the right to do in relation to a third party?

    <p>Sue the third party as they appear to be the principal.</p> Signup and view all the answers

    What must an agent do to express they are acting on behalf of the principal in writing?

    <p>Sign for and on behalf of the principal.</p> Signup and view all the answers

    What is a principal's right if an agent fails to exercise reasonable care?

    <p>To claim indemnity from the agent for any losses.</p> Signup and view all the answers

    Study Notes

    Agency

    • Agency is a contractual agreement where an agent acts on behalf of a principal.

    • Key elements of an agency include:

      • The principal authorizing the agent.
      • The agent acting under the principal's instructions.
      • Compensation for the agent.

    • An agent is a person authorized to act on behalf of the principal.

    • A principal is the person who empowers an agent to act on their behalf.

    • Agency relationships are important because skilled agents can handle tasks, the principal may lack time or expertise, or the principal might be abroad.

    • Agents must have the legal capacity (21+ and sound mind) to enter into an agency agreement.

    • Authority delegated to the agent may be actual (expressed or implied) or apparent (third party belief in agent's authority).

    • Principal's liability for delegated authority:

      • Successful task completion: Third-party contract established, but the agent remains bound by the original contract.
      • Tort: The principal can be held liable if the agent acts wrongfully while carrying out their duties.

    • Agency creation: Agency can be created by:

      • Actual authority (expressed or implied)
      • Authority by law.
      • Apparent authority
      • Agency of necessity
      • Ratification (the principal approves an agent's unauthorized action)

    • Rights of an agent against the principal:

      • Indemnity: The agent receives compensation for losses incurred while following the principal's instructions.
      • Lien: The agent holds the principal's property until payment for services has been received.

    • Types of agency:

      • Disclosed Agency: The principal's identity is known to the third party.
      • Undisclosed Agency: The identity of the principal is not known to the third party

    Termination of Agency

    • Agency can terminate due to the mutual agreement of the principle and agent

    • If the principal informs the agent and third party of termination, the agent is not liable for subsequent actions.

    • If the principal only informs the agent, they still retain apparent authority unless the third party is informed.

    • Irrevocable Authority: Principals cannot terminate if compensation is agreed upon before agency established

    • Termination (by force of law): -Expiry of a fixed period or task completion -Death, mental incapacity, or bankruptcy of one of the parties, or illegality of the subject matter

    Contract of Sale of Goods

    • A contract of sale involves transferring ownership from a seller to a buyer in exchange for payment.

    • Goods include physical items, intangible assets (like intellectual property), crops, and items attached to land (like trees, or minerals extracted.)

    • Purpose of a deposit: Deposits in a contract of sale demonstrate the buyer's intent to purchase.

    • Buyer defaults: Buyer forfeits the deposit to the seller.

    • Seller defaults: Seller returns double the amount of the deposit to the buyer.

    • Delivery methods by sea carrier: FOB (Free on Board) and CIF (Cost, Insurance, and Freight)

    Hire-Purchase Contract

    • A hire-purchase contract is a rental agreement with an option to buy.
    • A hire-purchase differs from a sale contract by:
      • The hirer is not obligated to buy. A buyer in a sale contract is obligated to buy.
      • Hire purchase contracts involve 3 parties (hirer, bank, owner). A contract of sale involves 2 parties (buyer and seller.)

    Negotiable Instruments

    • Negotiable instruments are documents guaranteeing defined payments on demand, or at a specific date.

    • Egyptian laws have three negotiable instruments: The bill of exchange, cheque and promissory note.

    Bill of Exchange

    • A bill of exchange is an order to a person (drawee) to pay a specified amount to another person (payee).
    • A bill of exchange contains an issue date and a due date.
    • The parties include the drawer, drawee and the payee.
    • Payee has rights and can endorse to another. The endorser remains liable unless otherwise stated.
    • If the drawee fails to pay, both the drawer and the payee are liable for payment.

    Cheques

    • A cheque is a negotiable instrument instructing a bank to transfer money from one account to another.

    • Parties include the drawer, bank, and payee.

    • A crossed cheque must be deposited into an account and cannot be cashed directly.

    • Issues with insufficient funds are criminal offenses.

    Promissory Notes

    • A promissory note is a written promise to pay a certain amount either at a set date, or on demand.

    • Key specifications for a promissory note: The agreement involves two parties (writer and payee.)

    • Promissory notes can be payable on demand, or at a set date

    • A payee can be a specific person or the bearer of the note.

    • Methods for transferring rights to a promissory note:

      • Endorsement (writing the new payee’s name on the back)
      • Hand Delivery.

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    Description

    Explore the fundamentals of agency law, including the key elements of an agency agreement, the roles of the principal and agent, and the implications of liability. Understanding these concepts is crucial for grasping the legal dynamics of representation and authority in contracts.

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