1. Agency may generally be defined as: -

1. arelationship between theofferorand theofferee.
2. arelationship which exists between two legal persons; the principal and the agent.
3. arelationship between the employer and the employee.
4. arelationship which exists between two legal persons; the husband and the wife.

2. The function of the agent is: -

1. totake care of the employer's business.
2. torepresent the principal in any dealings with third party.
3. tomaintain the relationship between the employer and the employee.
4. tomaintain 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. topay 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 principalwith 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 make an 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.

1. i, ii and iii
2. iand ii
3. i, ii, iii and iv
4. i, iii and iv

7.Agency relationshipbetween the principal, the agent and the third party,createswhat kind ofcontractswhich isenforceable by law;

1. A contract of agency between Principal and Agent
2. A commercial contract between the parties having intention to contract
3. A domestic contract between parties sitting in a near relation to each other
4. A contract ofbusinessbetween Principal and Third party
5. iandii
6. iand iii
7. iand iv
8. i, ii and iv

8. Section 138 of the Contracts Act1950provides that consideration is necessary to createa contract ofan agency.

a. True

b. False

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

1. byexpress appointment by the principal.
2. byimplied appointment by the principal.
3. byratification by the principal.
4. bynecessity.
5. bythe doctrine of estoppel or holding out.

1. i, ii and iii
2. ii, iii and iv
3. i, ii, iii, iv and v
4. i, iii and iv

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

1. spokenwords or in writing.
2. pointinga finger at any person intended to be his agent.
3. advertisementin the local newspaper.
4. announcinga person's name.

11. Section 140 of the Contracts Act provides that agency by implied appointment by the principal may fall into one of this three categories:-

i.byauthority inferred from the circumstances of the case

ii.byauthority inferred from things spoken or written

iii.byauthority inferred from the ordinary course of dealing

iv.byauthority inferred from announcing a person's name

1. i, ii and iii
2. ii, iii and iv
3. i, ii, iii and iv
4. i, iii and iv

12. The law would normally presumed that there exists the implied agency relationship between husband and wife. This implied agency is however limited to the followings fact:-

i.it only applies when a husband and wife are living together.

ii.itonly limited to the wife pledging the husband's credit for "necessaries".

iii.byauthority inferred from the ordinary course of dealing.

iv.byauthority inferred from announcing of the wife's name.

1. i, ii and iii
2. ii, iii and iv
3. i, ii, iii and iv
4. iand ii

13. The husband may rebut the presumption that he has agreed that the wife is to be his agent under the followingcircumstances:-

i.ifthe husband warns tradesman not to supply goods on his account to the wife's order.

ii.ifthe husband forbids his wife to pledge his credit in this way.

iii.ifthe goods are not necessaries and not needed by his wife.

iv.ifthe husband go and work outstation without informing the wife.

1. i, ii and iii
2. ii, iii and iv
3. i, ii, iii and iv
4. iand ii

14.Ilustrationin Section 140 of the Contracts Act 1950, reads:

"A owns a shop inKajang,livinghimself in Kuala Lumpur, and visiting the shop occasionally. The shop is managed by B, and he is in the habit of ordering goods from C in the name of A for the purpose of the shop, and of payingfor them out of A's funds with A's knowledge. B has an implied authority from A to order goods from C in the name of A for the purpose of the shop."

This illustration represent the principle that:-

1. anauthorityof a principalis said to beimpliedwhen it is to be inferred from the circumstances of the case.
2. anauthorityof an agentis said to beexpressedwhen it is to be inferred from the circumstances of the case.
3. anauthorityof a third partyis said to be implied when it is to be inferred from the circumstances of the case.
4. anauthority of an agent is said to be implied when it is to be inferred from the circumstances of the case.

15.The Partnership Act 1961provides thatPartners are each other's Agents by implied appointment when contracting in the course of the partnership business.

a. True

b. False

16. In Mercantile Credit Co. Ltd. vGarrod(1962)Garrodand his partner entered intoa partnership agreement for a business which lets garages and repaired cars, however, their business does not involve the buying and selling of cars. Despite this, his partnersold a car to a finance company and credit the sales money into the partnership account without the consent of partnerGarrod. His partner later disappeared. The finance company took action against theGarrodas a partner to the partnership when they found out that there was fraud in the sales.

The court held that:-

1. thefinance company was not entitled to recover the money fromGarrodbecause his partner acted as a partner and therefore an agent to the partnership .
2. thefinance company was entitled to recover the money fromGarrodbecause his partner is not acted as a partner and therefore an agent to the partnership .
3. thefinance company was entitled to recover the money fromGarrodbecause his partner acted as a partner and therefore not an agent to the partnership .
4. thefinance company was entitled to recover the money fromGarrodbecause his partner acted as a partner and therefore an agent to the partnership .

17. Agency by ratification arises in any one of the following situations:-

i.wherea person is giving a monthly salary by the principal.

ii.wherethe agent is out of jurisdiction when his appointment is made by the principal.

iii.wherean agent who was duly appointed as agent has exceeded his authority.

iv.wherea person who has no authority to act for the principal but has acted as if he has the authority.

1. i, ii and iii
2. ii, iii and iv
3. i, ii, iii and iv
4. iii and iv

18.Section 149 of the Contract Act 1950 provides that:

a. Where acts are done by one person on behalf of another but without his knowledge or authority, he may elect to ratify or to disown the acts. If he ratifies them, the same effect will follow as if they have been perform by his authority.

b. Where acts are done by one person on behalf of another but with his knowledge or authority, he may elect to ratify or to disown the acts. If he ratifies them, the same effect will follow as if they have been perform by his authority.

c. Where acts are done by one person on behalf of another but without his knowledge or authority, he may not elect to ratify or to disown the acts. If he ratifies them, the same effect will follow as if they have been perform by his authority.

d. Where acts are done by one person on behalf of another but without his knowledge or authority, he may not elect to ratify or to disown the acts. If he ratifies them, the same effect will follow as if they have been performnotby his authority.

19.The effect of ratification by the principal of the agent/person'sact are as follows:-

i.Theprincipal may sue or be sued by the third party.

ii. The agent no longer has any liability to the third party.

iii. The agent no longer liable for exceeding his authority.

iv. The principal is liable to pay the agent reasonable remuneration.

1. i, ii and iii
2. ii, iii and iv
3. i, ii, iii and iv
4. iii and iv

20. An agency by necessity may be created if the following conditions are met:-

i.Theprincipal may sue or be sued by the third party

ii. It is impossible for an agent to obtain the principal's instructions

iii. The agent's action is necessary to prevent loss to the principal with respect to the interest committed to his charge

iv. The agent must have acted in good faith

1. i, ii and iii
2. ii, iii and iv
3. i, ii, iii and iv
4. iii and iv