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Which one of the following statements is incorrect?
- a)An agency relationship may be created through necessity.
- b)An agency relationship may be created through estoppel.
- c)All agents are entitled to be paid for their services.
- d)An agent creates a legal relationship between a third party and a principal.
Correct answer is option 'C'. Can you explain this answer?
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Most Upvoted Answer
Which one of the following statements is incorrect?a)An agency relatio...
Incorrect Statement: All agents are entitled to be paid for their services.
Explanation:
An agency relationship is a legal relationship where one person, known as the agent, acts on behalf of another person, known as the principal. The agent is authorized to perform certain tasks and make decisions on behalf of the principal. This relationship is governed by the law of agency.
Agency Relationship:
There are several ways in which an agency relationship can be created. Some of the common ways include:
1. Express Agreement: An agency relationship can be created through an express agreement between the principal and the agent. This agreement can be in writing or oral.
2. Implication: An agency relationship can also be created by implication, where the conduct of the principal and the agent indicates that they intended to create such a relationship.
3. Necessity: An agency relationship may be created through necessity. This means that in certain circumstances, where it is not possible or practical for the principal to act on their own behalf, an agent may be appointed to act on their behalf. For example, if a person falls ill or is unable to attend a meeting, they may appoint an agent to represent them.
4. Estoppel: An agency relationship may be created through estoppel. Estoppel is a legal principle that prevents a person from denying or asserting something contrary to what they have previously stated or accepted as true. If a person acts as though someone is their agent, they may be estopped from denying that agency relationship.
Payment for Services:
While it is common for agents to be paid for their services, it is not a requirement for an agency relationship. In some cases, agents may work on a voluntary basis or may be compensated through other means, such as commission or a share of the profits. Therefore, the statement that all agents are entitled to be paid for their services is incorrect.
Conclusion:
In summary, the incorrect statement is that all agents are entitled to be paid for their services. While it is common for agents to be paid, it is not a requirement for an agency relationship. An agency relationship can be created through various means, including express agreement, implication, necessity, and estoppel.
Explanation:
An agency relationship is a legal relationship where one person, known as the agent, acts on behalf of another person, known as the principal. The agent is authorized to perform certain tasks and make decisions on behalf of the principal. This relationship is governed by the law of agency.
Agency Relationship:
There are several ways in which an agency relationship can be created. Some of the common ways include:
1. Express Agreement: An agency relationship can be created through an express agreement between the principal and the agent. This agreement can be in writing or oral.
2. Implication: An agency relationship can also be created by implication, where the conduct of the principal and the agent indicates that they intended to create such a relationship.
3. Necessity: An agency relationship may be created through necessity. This means that in certain circumstances, where it is not possible or practical for the principal to act on their own behalf, an agent may be appointed to act on their behalf. For example, if a person falls ill or is unable to attend a meeting, they may appoint an agent to represent them.
4. Estoppel: An agency relationship may be created through estoppel. Estoppel is a legal principle that prevents a person from denying or asserting something contrary to what they have previously stated or accepted as true. If a person acts as though someone is their agent, they may be estopped from denying that agency relationship.
Payment for Services:
While it is common for agents to be paid for their services, it is not a requirement for an agency relationship. In some cases, agents may work on a voluntary basis or may be compensated through other means, such as commission or a share of the profits. Therefore, the statement that all agents are entitled to be paid for their services is incorrect.
Conclusion:
In summary, the incorrect statement is that all agents are entitled to be paid for their services. While it is common for agents to be paid, it is not a requirement for an agency relationship. An agency relationship can be created through various means, including express agreement, implication, necessity, and estoppel.
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Community Answer
Which one of the following statements is incorrect?a)An agency relatio...
Normally, Agents are entitled to be paid for their services, But, in certain circumstances, a gratuitous agent i.e. someone who is not paid for their service, may also be an Agent.
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Which one of the following statements is incorrect?a)An agency relationship may be created through necessity.b)An agency relationship may be created through estoppel.c)All agents are entitled to be paid for their services.d)An agent creates a legal relationship between a third party and a principal.Correct answer is option 'C'. Can you explain this answer?
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