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Judiciary Exams Exam  >  Judiciary Exams Tests  >  Civil Law for Judiciary Exams  >  Test: Contract of Agency under Indian Contract Act - Judiciary Exams MCQ

Test: Contract of Agency under Indian Contract Act - Judiciary Exams MCQ


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20 Questions MCQ Test Civil Law for Judiciary Exams - Test: Contract of Agency under Indian Contract Act

Test: Contract of Agency under Indian Contract Act for Judiciary Exams 2024 is part of Civil Law for Judiciary Exams preparation. The Test: Contract of Agency under Indian Contract Act questions and answers have been prepared according to the Judiciary Exams exam syllabus.The Test: Contract of Agency under Indian Contract Act MCQs are made for Judiciary Exams 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Contract of Agency under Indian Contract Act below.
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Test: Contract of Agency under Indian Contract Act - Question 1
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Why are agency laws important in business transactions?

Detailed Solution for Test: Contract of Agency under Indian Contract Act - Question 1
Agency laws play a critical role in business transactions by ensuring clarity and accountability between principals and agents. These laws provide a framework for understanding the rights, duties, and responsibilities of all parties involved in an agency relationship. By defining these aspects, agency laws help in maintaining transparency and legal compliance in business dealings, ultimately fostering trust and efficiency in commercial interactions.
Test: Contract of Agency under Indian Contract Act - Question 2
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What is the role of the principal in an agency relationship?

Detailed Solution for Test: Contract of Agency under Indian Contract Act - Question 2
In an agency relationship, the principal plays a crucial role by delegating authority to the agent. This delegation empowers the agent to act on behalf of the principal in various transactions and matters. It is essential for the principal to clearly define the scope of authority granted to the agent to ensure clarity and accountability in the business relationship.
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Test: Contract of Agency under Indian Contract Act - Question 3
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Why are agency laws important in governing relationships between principals and agents?

Detailed Solution for Test: Contract of Agency under Indian Contract Act - Question 3
Agency laws are vital in governing relationships between principals and agents to ensure clarity and accountability in business transactions. These laws provide a structured framework for understanding the rights, duties, and responsibilities of all parties involved in an agency relationship. By establishing clear guidelines and expectations, agency laws help maintain transparency and facilitate smooth interactions between principals and agents.
Test: Contract of Agency under Indian Contract Act - Question 4
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According to Section 182 of the Indian Contract Act, an agent is defined as a person employed to act on behalf of another in dealings with third parties. How is the relationship between an agent and a principal typically characterized?
Detailed Solution for Test: Contract of Agency under Indian Contract Act - Question 4
The relationship between an agent and a principal is typically characterized as a Principal-Agent relationship. In this dynamic, the agent acts on behalf of the principal, representing their interests and carrying out transactions as authorized. This legal relationship is governed by the terms of the Contract of Agency, where the agent's actions bind the principal in dealings with third parties.
Test: Contract of Agency under Indian Contract Act - Question 5
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According to the Indian Contract Act, 1872, who is eligible to be appointed as an agent?
Detailed Solution for Test: Contract of Agency under Indian Contract Act - Question 5
As per the Indian Contract Act, 1872, individuals who have reached the age of majority and possess a sound mind are considered eligible to be appointed as agents. This requirement ensures that agents are legally capable of entering into contracts and carrying responsibilities towards the Principal, as outlined in Section 184 of the Act.
Test: Contract of Agency under Indian Contract Act - Question 6
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Why is having a sound mind and being of mature age crucial for someone acting as an agent?
Detailed Solution for Test: Contract of Agency under Indian Contract Act - Question 6
Having a sound mind and being of mature age is crucial for individuals acting as agents because it enables them to fulfill their responsibilities towards the Principal, as mandated by Section 184 of the Indian Contract Act, 1872. This requirement ensures that agents can effectively represent the interests of the Principal in contractual matters and carry out their duties responsibly.
Test: Contract of Agency under Indian Contract Act - Question 7
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What type of agency relationship is created when a person approves an act performed by someone as their agent without prior authorization?
Detailed Solution for Test: Contract of Agency under Indian Contract Act - Question 7
When a person later approves an act carried out by someone as their agent without initial authorization, it results in the creation of an agency by ratification. This legal concept highlights the retrospective validation of an agent's actions by the principal, emphasizing the importance of post hoc authorization in certain agency relationships.
Test: Contract of Agency under Indian Contract Act - Question 8
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What type of agent is appointed for a specific singular task?
Detailed Solution for Test: Contract of Agency under Indian Contract Act - Question 8
A Special Agent is appointed for a specific singular task, focusing on achieving a particular objective or goal within a limited scope of authority. This designation allows the principal to engage someone with specialized skills or expertise for a distinct purpose.
Test: Contract of Agency under Indian Contract Act - Question 9
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Which type of agent acts as a salesperson, broker, and guarantor, ensuring credit extended to the buyer?
Detailed Solution for Test: Contract of Agency under Indian Contract Act - Question 9
A Del Credere Agent acts not only as a salesperson and broker but also as a guarantor, ensuring that credit extended to the buyer is secure. This role involves additional risk and responsibility compared to a standard agent, as they guarantee the performance of the buyer in a transaction.
Test: Contract of Agency under Indian Contract Act - Question 10
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What type of authority is granted through spoken or written words according to Section 187 of the Indian Contract Act?
Detailed Solution for Test: Contract of Agency under Indian Contract Act - Question 10
Express authority, as defined in Section 187 of the Indian Contract Act, is granted through spoken or written words. This type of authority explicitly lays out the agent's powers and responsibilities. In contrast, implied authority is inferred from the circumstances of the case rather than being expressly stated.
Test: Contract of Agency under Indian Contract Act - Question 11
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In what circumstances is an agency relationship typically recognized between a husband and wife?
Detailed Solution for Test: Contract of Agency under Indian Contract Act - Question 11
An agency relationship between a husband and wife is usually recognized in specific cases where they have agreed that one of them can act as the agent of the other. This agreement can be established through a contract, appointment, or ratification. It allows for one spouse to legally represent the other in various matters as agreed upon, emphasizing the importance of mutual consent and understanding in their relationship.
Test: Contract of Agency under Indian Contract Act - Question 12
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Which liability aspect differentiates the consequences for a wrongful act committed by an agent versus a servant within their respective roles?
Detailed Solution for Test: Contract of Agency under Indian Contract Act - Question 12
When it comes to liability, if an agent commits a wrongful act within their authority, the principal is held responsible for their actions. This legal principle underscores the significant accountability that principals bear for the actions of their agents, emphasizing the impact of agency relationships on legal responsibilities and consequences.
Test: Contract of Agency under Indian Contract Act - Question 13
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Under the Indian Contract Act, what does Section 185 specify regarding consideration in the establishment of an agency?
Detailed Solution for Test: Contract of Agency under Indian Contract Act - Question 13
Section 185 of the Indian Contract Act clarifies that no consideration is needed to establish an agency. This exception to the general rule signifies that in the specific scenario of forming an agency, a contract can be considered valid even without the presence of consideration. This provision simplifies the process of creating agency relationships by removing the requirement of consideration.
Test: Contract of Agency under Indian Contract Act - Question 14
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What type of agency creation involves the straightforward establishment of an agency through a clear and direct statement of intent by both the Principal and the Agent?
Detailed Solution for Test: Contract of Agency under Indian Contract Act - Question 14
Agency by express agreement is a type of agency creation where both the Principal and the Agent clearly and directly express their intent to establish an agency relationship. This can be done through spoken or written words, leading to the creation of an agency. It is a fundamental method of forming an agency relationship based on the explicit agreement between the parties involved.
Test: Contract of Agency under Indian Contract Act - Question 15
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What principle states that an agent generally cannot delegate their duties to another person?
Detailed Solution for Test: Contract of Agency under Indian Contract Act - Question 15
The principle "Delegatus non potest delegare" in agency law establishes that an agent typically cannot delegate their responsibilities to another individual. This principle underscores the significance of the trust placed in the agent by the principal, emphasizing the agent's personal accountability in executing their designated duties.
Test: Contract of Agency under Indian Contract Act - Question 16
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What right entitles an agent to retain any movable or immovable property of the Principal until they receive their due remuneration?
Detailed Solution for Test: Contract of Agency under Indian Contract Act - Question 16
The right that allows an agent to retain any movable or immovable property of the Principal until they receive their due remuneration is known as the Right of Lien on Principal's Property. This right serves as a form of security for the agent to ensure they are compensated for their services. It grants the agent the authority to withhold the Principal's property until they are paid for the work they have done on behalf of the Principal.
Test: Contract of Agency under Indian Contract Act - Question 17
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What right entitles an agent to be compensated for any harm or losses they suffer due to the Principal's lack of skill or competence?
Detailed Solution for Test: Contract of Agency under Indian Contract Act - Question 17
The right to compensation grants the agent entitlement to seek compensation for any harm or losses they endure as a result of the Principal's lack of skill or competence. This right ensures that agents are protected in situations where the Principal's actions lead to financial losses or damages for the agent. It serves as a crucial element in maintaining fairness and accountability in agent-principal relationships.
Test: Contract of Agency under Indian Contract Act - Question 18
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When can an agent seek compensation for harm or losses suffered due to the Principal's lack of skill or competence?
Detailed Solution for Test: Contract of Agency under Indian Contract Act - Question 18
The right that allows an agent to seek compensation for any harm or losses they suffer due to the Principal's lack of skill or competence is referred to as the Right to Compensation. This right ensures that the agent is protected in situations where the Principal's actions or decisions result in financial or other losses for the agent. It serves as a mechanism to hold the Principal accountable for any negative consequences arising from their inadequacies, providing a form of recourse for the agent in such circumstances.
Test: Contract of Agency under Indian Contract Act - Question 19
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In what scenario can an agent hold onto the Principal's property until they receive their due remuneration?
Detailed Solution for Test: Contract of Agency under Indian Contract Act - Question 19
The right of lien on the Principal's property allows the agent to retain any movable or immovable property of the Principal until they receive their rightful remuneration. This right serves as a form of security for agents, ensuring that they are compensated for their services or expenses incurred during business dealings. By holding onto the Principal's property, agents have a means of recourse in situations where they are not duly paid for their services.
Test: Contract of Agency under Indian Contract Act - Question 20
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What is a defining characteristic of an agency contract under the Indian Contract Act?
Detailed Solution for Test: Contract of Agency under Indian Contract Act - Question 20
A defining characteristic of an agency contract under the Indian Contract Act is that it arises when one person delegates authority to another to perform specific tasks or a range of duties in designated areas of work. This delegation of authority establishes a Principal-Agent relationship, outlining the rights and responsibilities of both parties involved.
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