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Questions and Answers
What is the primary role of an agent in a principal-agent relationship?
What is the primary role of an agent in a principal-agent relationship?
In a transaction facilitated by an agent, who holds the legal relationship with the third party?
In a transaction facilitated by an agent, who holds the legal relationship with the third party?
What happens if something goes wrong in a transaction facilitated by an agent?
What happens if something goes wrong in a transaction facilitated by an agent?
Which of the following actions is typically NOT a function performed by an agent on behalf of the principal?
Which of the following actions is typically NOT a function performed by an agent on behalf of the principal?
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What kind of relationship does an agent have with the principal?
What kind of relationship does an agent have with the principal?
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In a scenario where an agent is appointed to buy a phone, who authorizes the agent's actions?
In a scenario where an agent is appointed to buy a phone, who authorizes the agent's actions?
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What is one reason for having an agent?
What is one reason for having an agent?
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Which party handles the transaction directly with the third party in a principal-agent relationship?
Which party handles the transaction directly with the third party in a principal-agent relationship?
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What determines what an agent can and cannot do?
What determines what an agent can and cannot do?
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Which statement is true regarding a principal's capacity?
Which statement is true regarding a principal's capacity?
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Which type of agent has unlimited authority to act on behalf of the principal?
Which type of agent has unlimited authority to act on behalf of the principal?
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Why does it not matter whether an agent has active capacity?
Why does it not matter whether an agent has active capacity?
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What is a characteristic of a del credere agent?
What is a characteristic of a del credere agent?
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In what situation can an agent be appointed without a contract?
In what situation can an agent be appointed without a contract?
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What type of agency involves partial disclosure of the principal?
What type of agency involves partial disclosure of the principal?
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Which of the following best describes a limited agent?
Which of the following best describes a limited agent?
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Study Notes
Understanding Agency
- Agency is a legal relationship where an agent acts on behalf of a principal.
- An agent possesses authority to create, alter, or discharge legal obligations for the principal with third parties.
Roles in Agency
- The agent performs transactions, while the principal is the party represented.
- Actions taken by the agent are legally attributed to the principal, as if the principal performed them.
Visual Example of Agency
- Charlie (principal) authorizes Kevin (agent) to transact with Cynthia (third party).
- Kevin and Cynthia have no direct contractual relationship; only Charlie and Cynthia do.
- If issues arise, the agent may be liable to either the principal or the third party.
Agent Responsibilities
- Agents are empowered to:
- Contract on behalf of the principal.
- Sign documents.
- Perform juridical acts.
- Transfer property.
- Initiate court actions or appeals.
- Handle financial transactions (accept or make payments).
Benefits of Using Agents
- Using agents is practical, efficient, and often necessary due to:
- Specialized knowledge or expertise.
- Geographic limitations, particularly in international dealings.
- Companies requiring representation.
Agent Authority
- Agent's powers come from a contract or established authority.
- Agents can be appointed without a contract, leading to ambiguities in their authority and duties.
Capacity Considerations in Agency
- The principal must possess contractual capacity to be bound by the contract facilitated by the agent.
- Agents do not need active capacity to perform their duties; their role is purely facilitative.
- Scots law does not mandate agents have contractual capacity; this contrasts with English law, which permits agency through unilateral authority by the principal.
Types of Agents
- Universal Agent: Holds unlimited authority for various transactions (e.g., general power of attorney).
- General Agent: Authorized for a broad range of activities on behalf of the principal.
- Limited Agent/Ad Hoc: Engaged for specific tasks only.
- Del Credere Agent: Acts as a guarantor for the financial solvency of third parties.
Principal Disclosure
- Agents may disclose their agent status and the principal's identity (disclosed principal).
- Alternatively, agents may indicate their agent status without revealing the principal (unidentified principal).
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Description
This quiz covers the fundamental concepts of agency, including the legal relationship between agents and principals. It explores the roles of both parties, the responsibilities of agents, and provides a visual example for better understanding. Test your knowledge on how agents execute transactions and the legal implications involved.
