Contract Act 1872 Part 4 Agency MCQs

1. Question 1 of 39

   Under Section 187, how does Section 187 distinguish 'express' authority from 'implied' authority of an agent?

   A Express authority is given by words spoken or written; implied authority is to be inferred from the circumstances of the case B There is no meaningful distinction between the two under the Act C Express authority applies only to agents of companies; implied authority applies to individuals only D Express authority requires a notarized document; implied authority requires none at all
2. Question 2 of 39

   Under Section 186, how may an agent's authority be conferred?

   A Only through a registered power of attorney B Only in writing, signed by the principal C Expressly or impliedly D Only through court order
3. Question 3 of 39

   Which section of the Contract Act deals with an agent's authority in an emergency?

   A Section 188 B Section 189 C Section 187 D Section 186
4. Question 4 of 39

   Under Section 184, who may be an agent, as between the principal and third persons?

   A As between the principal and third persons, any person may become an agent B Only a person who has attained the age of majority and is of sound mind C Only a licensed advocate D Only a person registered with a government agency
5. Question 5 of 39

   Under Section 238, what is the effect on an agreement of misrepresentation made, or fraud committed, by an agent acting within the scope of his authority?

   A The agent alone bears all consequences; the principal is entirely unaffected B It has no legal effect on the agreement at all C It has the same effect on the agreement as if the misrepresentation or fraud had been made or committed by the principal D Such an agreement is automatically void, with no possibility of ratification
6. Question 6 of 39

   Under Section 201, by what general means may an agency be terminated?

   A Only by a formal court decree B By the principal revoking his authority, the agent renouncing the business of the agency, completion of the business, death or unsoundness of mind of either party, or the principal's insolvency C An agency, once created, can never be terminated D Only by the express written consent of both parties
7. Question 7 of 39

   Under Section 197, may ratification of an unauthorized act be either express or implied?

   A Yes B No, ratification must always be express and in writing C No, only implied ratification is recognized under the Act D No, ratification must always be granted by a court
8. Question 8 of 39

   Under Section 227, what happens where an agent does more than he is authorized to do, and the authorized and unauthorized parts of the act can be separated?

   A So much of what he does as is within his authority is binding as between him and his principal B The principal is automatically bound by the whole act regardless of the excess C The agent alone bears liability for the entire act D The entire act is automatically void, authorized and unauthorized parts alike
9. Question 9 of 39

   Under Section 198, what knowledge is generally requisite for a valid ratification of an unauthorized act?

   A No particular knowledge is required for valid ratification B Full knowledge of all material facts, unless the person ratifying intended to ratify regardless of the facts C Ratification requires knowledge obtained exclusively through a court proceeding D Only knowledge of the identity of the person who performed the act
10. Question 10 of 39

    Under Section 222, what must a principal do for an agent, regarding lawful acts done by the agent in exercise of his authority?

    A Provide indemnity only for acts specifically pre-approved in writing B Indemnify the agent only if the agency is for reward, not if gratuitous C Indemnify the agent against the consequences of all lawful acts done in exercise of that authority D Nothing; agents bear all risk of their own actions
11. Question 11 of 39

    Which section of the Contract Act addresses compensation to an agent for injury caused by the principal's neglect?

    A Section 224 B Section 223 C Section 222 D Section 225
12. Question 12 of 39

    Under Section 217, what right does an agent have regarding sums received on account of the principal?

    A A right of retainer limited strictly to remuneration, excluding advances or expenses B A right of retainer, out of such sums, for all moneys due to himself in respect of advances made or expenses properly incurred in conducting the business, and for remuneration C No right of retainer whatsoever; all sums must be remitted immediately in full D A right of retainer only if expressly granted in a separate written contract
13. Question 13 of 39

    Under Section 235, what is the liability of a person who falsely represents himself to be an agent of another, and thereby induces a third person to deal with him as such?

    A No liability arises unless the false agent personally profited B He is liable for breach of an implied warranty of authority, if his alleged principal does not ratify his acts C The third person alone bears the loss, with no recourse against the false agent D Liability rests solely with the true (non-existent) principal
14. Question 14 of 39

    Under Section 185, is consideration necessary to create a valid agency?

    A No, consideration is not necessary between principal and agent B Yes, but only nominal consideration of Re.1 is required C Yes, an agency is void without consideration, just like an ordinary contract D Yes, unless the agency relates to immovable property
15. Question 15 of 39

    Under Section 211, what is an agent's duty in conducting his principal's business?

    A To conduct the business only through a registered sub-agent B To act entirely according to his own personal judgment, regardless of instructions C To conduct it according to the principal's directions, or, absent such directions, according to the custom prevailing in similar businesses D To always seek prior court approval before any transaction
16. Question 16 of 39

    Under Section 230, as a general rule, can an agent personally enforce contracts entered into by him on behalf of his principal, or be personally bound by them?

    A No, subject to a presumption of a contract to the contrary in certain circumstances (e.g. where the agent contracts for a foreign principal) B Yes, an agent is always personally liable on every contract he makes for a principal C Yes, but only for contracts exceeding a specified value D Yes, but only in contracts relating to immovable property
17. Question 17 of 39

    Under Section 202, if the agent has an interest in the subject-matter of the agency (an 'agency coupled with interest'), may the principal revoke the agency to the prejudice of that interest, absent an express contract?

    A Yes, the principal may always revoke it freely B Yes, but only with a court's approval C No D Yes, but only after giving one year's notice
18. Question 18 of 39

    Under Section 190, when can an agent lawfully delegate his authority to a sub-agent, as a general rule?

    A As a general rule, an agent cannot lawfully employ another to perform acts which he has expressly or impliedly undertaken to perform personally, unless the ordinary custom of trade permits delegation, or the nature of the agency requires it B An agent may always freely delegate to a sub-agent without restriction C Delegation is permitted only with the sub-agent's own prior written consent D Delegation is entirely prohibited under all circumstances
19. Question 19 of 39

    Under Section 218, subject to his right of retainer, what must an agent do with sums received on the principal's account?

    A Donate any surplus to charity B Pay them to the principal C Retain them indefinitely until the agency formally ends D Deposit them with a court
20. Question 20 of 39

    Under Section 237, when is a principal liable for the unauthorized acts of an agent?

    A Where the principal's own conduct induces third persons to believe that those acts were within the scope of the agent's authority B Only where the unauthorized act is later ratified in writing by the principal C A principal is automatically liable for every act an agent takes, authorized or not D A principal is never liable for an agent's unauthorized acts, under any circumstances
21. Question 21 of 39

    Which section of the Contract Act deals with an agent's lien on the principal's property?

    A Section 219 B Section 220 C Section 217 D Section 221
22. Question 22 of 39

    Under Section 196, what is the effect where acts are done by one person on behalf of another, but without that other's knowledge or authority?

    A Such acts can never have any legal effect whatsoever B Such acts are always automatically void and cannot be ratified C That other person may elect to ratify or disown such acts; if he ratifies, the same effects follow as if the acts had been performed by his authority D Such acts automatically bind the person on whose behalf they were done, with no election required
23. Question 23 of 39

    Under Section 200, can ratification of an unauthorized act injure a third person, if the act would otherwise be lawful?

    A Yes, ratification always overrides the interests of any third person B No, ratification is never valid where any third person exists C No, ratification cannot injure a third person if the act would not have been lawful without such injury, or where such person's rights are dependent on the act's timing D Yes, but only where the ratifying party is the government
24. Question 24 of 39

    Which section of the Contract Act deals with who may employ an agent?

    A Section 182 B Section 185 C Section 183 D Section 184
25. Question 25 of 39

    Under Section 231, where an agent makes a contract for a principal who is not disclosed, and the principal wishes to claim the benefit of the contract, must he accept the contract in its entirety, subject to any rights of third parties?

    A No, only the agent may ever enforce such a contract B Yes C No, an undisclosed principal has no rights under the contract at all D No, he may selectively enforce only the favourable parts
26. Question 26 of 39

    Under Section 212, what degree of skill and diligence is generally required from an agent?

    A The highest conceivable standard, regardless of the agent's actual expertise B No particular standard is imposed on agents by the Act C As much skill as is generally possessed by persons engaged in similar business, and reasonable diligence, using such skill as he possesses D Only the standard specified in the agent's personal résumé
27. Question 27 of 39

    Under Section 209, upon termination of an agency by the principal's death or insanity, what is the agent's duty regarding the principal's representatives?

    A The agent's duty transfers automatically and entirely to a court-appointed receiver B No further duty exists once the principal dies or becomes insane C To take all reasonable steps to protect and preserve the interests entrusted to him D The agent must immediately liquidate all of the principal's property
28. Question 28 of 39

    Under Section 182, how is an 'agent' defined?

    A A person employed to do any act for another, or to represent another in dealings with third persons B A person to whom goods are delivered for safekeeping C A person who receives goods as security for a debt D A person who guarantees the debt of a third person
29. Question 29 of 39

    Under Section 205, if an agency is for a fixed period, and the principal revokes it (or the agent renounces it) without sufficient cause before that period expires, what follows?

    A The party so revoking or renouncing must compensate the other for any resulting damage B The agency automatically continues regardless of the purported revocation C Only the agent may ever claim compensation, never the principal D No compensation is payable under any circumstance
30. Question 30 of 39

    Under Section 228, what happens where an agent exceeds his authority, and the authorized and unauthorized parts of the act CANNOT be separated?

    A The agent automatically becomes the principal for that transaction B The transaction is binding on the principal only if he later profits from it C The principal is not bound by the transaction D The principal remains bound only by the unauthorized part
31. Question 31 of 39

    Under Section 236, if a person falsely contracts as an agent for someone without authority, can that person compel performance of the contract from the party who dealt with him under that false belief?

    A Yes, provided he later obtains authority before the contract is performed B Yes, but only if he genuinely believed he had authority C Yes, he may always compel performance regardless of the false claim D No, a person so falsely contracting is not entitled to performance
32. Question 32 of 39

    Under Section 229, what is the general rule on the effect of notice given to an agent, regarding any matter connected with the business of the agency?

    A It produces the same legal consequence as if notice had been given to the principal B Notice to an agent binds the principal only if the agent is a licensed advocate C Notice to an agent has no legal effect on the principal at all D Notice to an agent binds the principal only if given in writing
33. Question 33 of 39

    Under Section 182, the person for whom an act is done, or who is represented, by an agent is called what?

    A The bailor B The surety C The principal D The pawnor
34. Question 34 of 39

    Under Section 215, what right does a principal have where his agent deals on his own account in the business of the agency without the principal's consent?

    A No remedy is available to the principal in such circumstances B The principal must always accept the transaction as binding C The principal may repudiate the transaction, if the case shows material facts were dishonestly concealed, or the dealing was disadvantageous to the principal D The agency automatically terminates with no further consequence
35. Question 35 of 39

    Under Section 226, through an agent's contracts made on the principal's behalf, within the scope of his authority, who is generally bound and entitled to benefits, as if the contracts had been made personally?

    A The principal B The agent personally, in every case C A court-appointed trustee D Neither party; such contracts are automatically void
36. Question 36 of 39

    Under Section 203, when may a principal generally revoke the authority given to his agent?

    A Never, once an agency is created B At any time before the authority has been exercised so as to bind the principal, unless otherwise expressly or impliedly agreed C Only with the agent's prior written consent D Only through formal court proceedings
37. Question 37 of 39

    Under Section 191, how is a 'sub-agent' defined?

    A A person appointed by the principal to supervise the original agent B A person who replaces the original agent entirely C Any person who assists the principal directly, bypassing the original agent D A person employed by, and acting under the control of, the original agent in the business of the agency
38. Question 38 of 39

    Which section of the Contract Act deals with an agent's duty to communicate with his principal?

    A Section 211 B Section 214 C Section 212 D Section 213
39. Question 39 of 39

    Under Section 213, what is an agent generally bound to do regarding his accounts?

    A Render accounts only if the agency was for reward, never if gratuitous B Render proper accounts to his principal on demand C Nothing; agents have no accounting obligation under the Act D Render accounts only once, at the very end of the agency

You can practise as a guest, but sign in to save your score and track your progress.