Question

1. Which of the following is not a breach of an agent's duty of obedience?

   	a.	Refusing to follow the principal/employer's instruction to misrepresent the quality of a competitor’s goods to a potential customer.
   	b.	Improperly delegating her authority.
   	c.	Committing a tort for which the principal is liable.
   	d.	Entering into an unauthorized contract for which his or her principal is liable.

1. The operation of agency involves at least three persons.

   True

   False

2. An agency:

   	a.	must be created with consideration.
   	b.	requires a formal writing, called a power of attorney.
   	c.	which is voidable because of the incapacity of an agent results in only voidable contracts with third parties.
   	d.	is a consensual relationship that the principal and agent may form by contract or agreement.

1. An agent whose compensation depends on his accomplishing a specific result is entitled to the agreed compensation only if the result is achieved within a reasonable time if no time is stated.

   True

   False

Answer 1

1) Which of the following is not a breach of an agent's duty of obedience?

a. Refusing to follow the principal/employer's instruction to misrepresent the quality of a competitor’s goods to a potential customer.

As per, Business Law, 'Refusing to follow the principal's instruction of misrepresentation' is not a violation. Improper delegation of duty, committing a tort and getting into an unauthorized contract can be considered as a violation of agents duty.

2) The operation of the agency involves at least three persons.

False.

Based on Commercial Law, the definition of an agency suggests that only two parties are mandatory to form and run it. The principle and the agent.

3) An agency

d. is a consensual relationship that the principal and agent may form by contract or agreement.

There are two parties required to form an agency. Principal and the agent. An agent has the authorization to represent the principal while dealing with clients. Option 'a' lacks clarity in a statement. An agency doesn't require the power of attorney and is not voidable due to the incompetency of an agent.

4) An agent whose compensation depends on his accomplishing a specific result is entitled to the agreed compensation only if the result is achieved within a reasonable time if no time is stated.

True

As per the agreement with a principal and an agent, if an agent's compensation depends on accomplishing a task then he/she should fulfill it within a reasonable time if no time is stated. So this is a true statement.