Contract of Agency MCQs | Business Law

By: Prof. Dr. Fazal Rehman | Last updated: May 29, 2025

1. : Under what conditions may an agent hire or appoint a sub-agent and delegate the work?
(A) The principal has expressly allowed a delegation of such authority
(B) The ordinary custom of trade a sub-agent may be employed
(C) The nature of work is such that a sub-agent is essential
(D) All of these

2. : What is the effect of ratification?
(A) Ratification is started from the time of making a contract between the ratifier of the act and the person who did the act
(B) A contractual relationship is started between the ratifier and the third party
(C) Both A & B
(D) None of these

3. : Which is correct for a substituted agent or co-agent?
(A) A co-agent works under the rules, regulations, and instructions of the principal
(B) There is an agreement or contract between the co-agent and the principal
(C) A co-agent is not affected by the termination of the original agency
(D) All of these

4. : Where a sub-agent is appropriately selected and appointed by an agent to delegate the work:
(A) The principal is bound by the acts of the sub-agent as if the sub-agent was an agent originally appointed by the principal
(B) The agent is accountable and answerable to the principal for the acts of the sub-agent
(C) The sub-agent is accountable and answerable for his acts to the agent, but not to the principal, except in case of scam or fraud
(D) All of these

5. : Where a sub-agent is not appropriately chosen and appointed by an agent to delegate the work:
(A) The agent stands as a principal towards such a sub-agent
(B) The principal is not represented by such sub-agent and so he/she is not accountable and responsible for the acts of the sub-agent
(C) The agent is accountable and responsible for the acts of the sub-agent to the principal as well as to the third parties
(D) All of these