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Agency is formed when one party delegates authority to another party to perform actions on behalf of the first party. True or False? |
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According to the Indian Contract Act, 1872, what governs the laws related to agency? |
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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. |
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Agency laws are significant because most business transactions globally are conducted through agency relationships. |
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Illustration: If a businessman delegates someone to buy goods, what roles do the parties play? |
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The businessman is the Principal, the person he delegates is the Agent, and the seller is the Third Party. |
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Any person who has reached the age of majority and possesses a sound mind can legally appoint an agent. |
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An agent must be someone who has reached the age of majority and has a ___ mind. |
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The principal is responsible for all lawful actions taken by the agent within the scope of the agent's authority. |
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False. An agent is not liable to the principal if they are a minor or of unsound mind. |
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True or False: An agent can appoint a sub-agent without the principal's permission. |
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False. An agent can only appoint a sub-agent with the permission of the principal. |
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True or False: An agent can be a minor and still bind the principal in contracts with third parties. |
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False. A minor cannot be an agent in a way that makes them responsible to their principal. |
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What is the significance of power of attorney in relation to the principal's mental capacity? |
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If the principal becomes mentally incapacitated after granting power of attorney, the authority granted becomes worthless. |