LAW OF AGENCY

1. Explain what is meant with agency by ratification.

2. State the requirements which must be satisfied before an agency by ratification can arise.

3. Explain THREE (3) duties of an agent to a principal under the Contracts Act 1950.

4. Explain TWO (2) duties of a principal to an agent under the Contracts Act 1950.

5. In relation to the law of agency, explain the ways by which an agency may come into existence.

6. Amy asked Richard to act as her agent to purchase a house for her. Richard agreed to do so for free. Amy's instructions were that the house should be located in Putrajaya, it should have at least six bedrooms and should not cost more than RM900,000. Richard found a suitable house in Putrajaya but the owner was only willing to sell it at the price of RM970,000. Richard decided to purchase the house and entered into a contract with the owner on behalf of Amy.

Required:

(a) As there is no written agreement between them, and there is no consideration given by Amy, explain whether a valid agency exists between Amy and Richard.

(b) Explain whether the contract made by Richard on behalf of Amy is binding upon Amy.

(c) In the event that the contract is not legally binding upon Amy, state whether or not she can choose to accept it.

7. In the context of the law of agency, explain the following types of agent's authority:

(a) actual authority; and

(b) ostensible (apparent) authority.

8. How can an agency be terminated?

9. Explain THREE duties of an agent to a principal under the Contracts Act 1950; and

10. Explain TWO duties of a principal to an agent under the Contracts Act 1950.