According to the relationship between an original agent and a sub-agent as per the Indian Contract Act, which of the following statements is true?

The principal can directly sue the sub-agent for negligence.

The sub-agent cannot create rights and liabilities for the original agent.

The principal cannot be held liable for the actions of a sub-agent appointed without authority.

The original agent is not answerable to the principal for the actions of the sub-agent.

In the case of unauthorized appointment of a sub-agent by an agent, how is the liability distributed according to the Indian Contract Act?

The principal is fully liable for the actions of the sub-agent.

The agent is solely responsible for any contracts entered into by the sub-agent.

The sub-agent is held accountable for all actions undertaken on behalf of the principal.

The principal bears no liability for the actions of the unauthorized sub-agent.

What conditions must be met before an original agent can appoint a substituted agent according to Section 194 of the Indian Contract Act, 1872?

The principal must authorize the original agent to make such appointments, and the original agent must assign someone to act on the principal's behalf in a specific area of the agency's business.

The original agent must inform the principal about the appointment, and the principal must approve of the substitution.

The original agent must have a good relationship with the substitute, and the substitute must have prior experience in the same field.

The original agent must have written permission from the principal and must share the profits with the substitute.

What duty does Section 195 impose on the agent regarding the selection of a substitute agent?

The agent must appoint a close relative as a substitute to ensure loyalty.

The agent must exercise the same level of care that a reasonable person would when selecting a substitute agent.

The agent must choose a substitute with the lowest fee to save costs for the principal.

The agent must delegate all responsibilities to the substitute without any involvement.

According to Section 194 of the Indian Contract Act, 1872, what conditions must be met by the original agent before appointing a substituted agent?

The principal must not have authorized the original agent to make such appointments, and the original agent must act on behalf of the principal in a different business area.

The principal must have authorized the original agent to make such appointments, and the original agent must act on behalf of the principal in a specific area of the agency's business.

The principal must not have authorized the original agent to make such appointments, and the original agent must act independently of the principal.

The principal must have authorized the original agent to make such appointments, and the original agent must act independently of the principal.

What duty does Section 195 impose on the agent concerning the selection of a substitute agent?

The duty to appoint a substitute agent without the principal's consent.

The duty to appoint a substitute agent based on personal preferences.

The duty to exercise the same level of care as a reasonable person in selecting a substitute agent.

The duty to delegate responsibilities entirely to the substitute agent.

What distinguishes a sub-agent from a substituted agent in terms of control and direction within an agency relationship?

The primary agent maintains direct control over a sub-agent, while a substituted agent is under the direct control of the principal.

A sub-agent has direct control over the actions of the principal, whereas a substituted agent acts independently.

Both a sub-agent and a substituted agent are directly controlled by the principal.

There is no distinction between the control and direction of a sub-agent and a substituted agent.

What is a key difference between the liability of a sub-agent and a substituted agent towards the principal in an agency relationship?

A sub-agent is only liable to the original agent, while a substituted agent is liable to both the principal and the original agent.

A sub-agent is not accountable for any actions, whereas a substituted agent bears all liability.

Both a sub-agent and a substituted agent share equal liability towards the principal.

A sub-agent is directly accountable to the principal, while a substituted agent is accountable to the original agent.

What distinguishes the relationship between a sub-agent and the original agent from that of a substituted agent and the principal?

The sub-agent is directly accountable to the principal for their actions.

The substituted agent is compensated by the original agent.

The sub-agent has a direct privity of contract with the principal.

The substituted agent is directly liable to the principal for intentional wrongs.

How does the appointment process for a sub-agent contrast with that of a substituted agent?

A sub-agent is appointed based on specialized skills, while a substituted agent is appointed for business needs.

The original agent appoints a sub-agent with explicit authorization from the principal.

The appointment of a substituted agent requires direct authorization from the principal.

A substituted agent is appointed based on trade customs, unlike a sub-agent.

Difference Between Sub-Agent and Substituted Agent Free MCQ Practice Test with Solutions

	Civil Law for Judiciary Exams 279 docs\|259 tests

	Civil Law for Judiciary Exams 279 docs\|259 tests

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