Contract of Agency MCQs | Business Law

By: Prof. Fazal Rehman Shamil
Last modified on January 18th, 2021

Solved MCQs of Contract of Agency in Business Law

A sub-agent is the employee who is specially employed by the original agent to act under his control in the business of the agency. The usual rule and regulation are that an agent is not allowed to delegate his authority to another person especially when he/she has not the permission of his principal. Under what conditions an agent may 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
(E). None of these
MCQ Answer: (E). All of these


Which of the following 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 of the act.
(B). A contractual relationship is started between the ratifier and the third party.
(C). Both A&B
(D). None of these
MCQs Answer: (C). Both A&B


Which is correct for 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). Co-agent is not affected by the termination of the original agency.
(D). All of these
(E). None of these
MCQ Answer: (D). All of these


Which are the methods in which an agency relationship, familiar in law, can be established?
(A). by agreement
(B). by ratification
(C). by estoppel
(D). by necessity.
(E). All of these
(F). None of these
MCQ Answer: (E). All of these


An agent is a special employee who is employed to do any act for another or to represent another in dealing with any of the third person.
(A). True
(B). False
(C). Partially True
MCQ Answer: (A). True


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 subagent was an agent originally appointed by the principal.
(B). The agent is accountable and answerable to the principal for the acts of the subagent.
(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
(E). None of these
MCQ Answer: (D). All of these


Which of the following are the types of agents?
(A). Commercial agent or mercantile agent
(B). Auctioneer
(C). Company directors and managers
(D). Partners in a business partnership
(E). All of these
(E). None of these
MCQ Answer: (E). All of these


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
(E). None of these
MCQ Answer: (D). All of these

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Prof. Fazal Rehman Shamil