1. Agency may generally be defined as: -

a.a relationship between the offeror and the offeree.

b.a relationship which exists between two legal persons; the principal and the agent.

c.a relationship between the employer and the employee.

d.a relationship which exists between two legal persons; the husband and the wife.

2. The function of the agent is: -

a.to take care of the employer's business.

b.to represent the principal in any dealings with third party.

c.to maintain the relationship between the employer and the employee.

d.to maintain the relationship which exists between two legal persons; the husband and the wife.

3. The function of the principal is:-

a. to take care of the agent.

b. to pay the agent their remuneration when they fail to perform their duty.

c. to pay for all expenses incurred by the agent in caring for their family.

d. to be responsible for all act done legally for and on behalf of the principal with the third party, by the agent.

4. Who may become the principal to the agent under Section 136 of the Contract Act 1950:-

a. Any person who has the money and able to pay the salary of an agent.

b. Any person of the age of majority and of unsound mind.

c. any person of the age of minority and of sound mind.

d. Any person of the age of majority and who is of sound mind.

5. Who may become the agent to the principal under Section 137 of the Contract Act 1950:-

a. Any person can become an agent.

b. any person who want to represent another person and make some money out the contract.

c. Any person who is of sound mind and of the age of minority.

d. As between the principal and the third persons, any person may become an agent but to be responsible to the principal the agent must be of the age of majority and of sound mind.

6. Section 141 of the Contract Act provides for the extent of an agent's authority which includes:-

i. An agent having an authority to do act has authority to do every lawful thing which is necessary in order to do the act.

ii. An agent having an authority to carry on a business has authority to do every lawful thing necessary for the purpose, or usually done in the course of conducting such business.

iii. An authority inferred from the circumstances of the case; and from things spoken or written.

iv. An authority inferred from the ordinary course of dealing.

a.i, ii and iii

b.i and ii

c.i, ii, iii and iv

d.i, iii and iv

7. Agency relationship between the principal, the agent and the third party, creates what kind of contracts which is enforceable by law;

i.A contract of agency between Principal and Agent

ii.A commercial contract between the parties having intention to contract

iii.A domestic contract between parties sitting in a near relation to each other

iv.A contract of business between Principal and Third party

a.i and ii

b.i and iii

c.i and iv

d.i, ii and iv

8. Section 138 of the Contracts Act 1950 provides that consideration is necessary to create contract of an agency.

a. True

b. False

9. Agency may arise in any of the following ways:-

(i)by express appointment by the principal.

(ii)by implied appointment by the principal.

(iii)by ratification by the principal.

(iv)by necessity.

(v)by the doctrine of estoppel or holding out.

a.i, ii and iii

b.ii, iii and iv

c.i, ii, iii, iv and v

d.i, iii and iv

10. Section 140 of the Contracts Act provides that agency by express appointment by the principal can be done by:-

a.spoken words or in writing.

b.pointing a finger at any person intended to be his agent.

c.advertisement in the local newspaper.

d.announcing a person's name.