Agency is formed when one party delegates authority to another party to perform actions on behalf of the first party. True or False?

True. Agency is indeed formed through the delegation of authority.

The relationship of agency can be either ___ or ___.

Express or implied.

According to the Indian Contract Act, 1872, what governs the laws related to agency?

Chapter X of the Indian Contract Act, 1872 governs the laws related to agency.

In the principal-agent relationship, who are the three main parties involved?

The Principal, the Agent, and a Third Party.

A acts on behalf of B, where A is the agent. True or False?

False. If A acts on behalf of B, then B is the principal and A is the agent.

Fill in the blank: An agent acts on behalf of the principal, either representing the principal in transactions with ___ or performing acts for the principal.

Third parties.

What is the significance of agency laws in business transactions?

Agency laws are significant because most business transactions globally are conducted through agency relationships.

Illustration: If a businessman delegates someone to buy goods, what roles do the parties play?

The businessman is the Principal, the person he delegates is the Agent, and the seller is the Third Party.

Fill in the blank: The agent's actions must ___ the principal.

Bind

True or False: All corporations operate without any agency relationships.

False. All corporations operate through agency relationships.

Who is legally capable of appointing an agent?

Any person who has reached the age of majority and possesses a sound mind can legally appoint an agent.

True or False: A minor can appoint an agent.

False. Minors cannot appoint an agent.

An agent must be someone who has reached the age of majority and has a ___ mind.

Sound

What is the principal's liability regarding the actions of an agent?

The principal is responsible for all lawful actions taken by the agent within the scope of the agent's authority.

True or False: An agent is liable to the principal even if they are a minor.

False. An agent is not liable to the principal if they are a minor or of unsound mind.

Fill in the blank: No consideration is necessary for ___ an agency.

Creating

What does Section 185 state about consideration in agency creation?

Section 185 states that no consideration is necessary for creating an agency.

Anyone who is of the age of majority and of sound mind can ___ an agent.

Employ

True or False: An agent can appoint a sub-agent without the principal's permission.

False. An agent can only appoint a sub-agent with the permission of the principal.

What happens if the agent is removed regarding the sub-agent?

If the agent is removed, the sub-agent is automatically terminated.

The principal must be ___ and ___ to contract in an agency relationship.

Of the age of majority and of sound mind

True or False: An agent can be a minor and still bind the principal in contracts with third parties.

False. A minor cannot be an agent in a way that makes them responsible to their principal.

What is the significance of power of attorney in relation to the principal's mental capacity?

If the principal becomes mentally incapacitated after granting power of attorney, the authority granted becomes worthless.

Consideration is required to establish an agency relationship. True or False?

False. No consideration is required to establish an agency relationship.

An agent must have the capacity to ___ the principal to third parties.

Legally bind