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Question 38 specimen paper:
In the context of the law of agency, an agent will NOT be liable for a contract in which of the following instances?
A Where the agent fails to disclose that they are acting as such
B Where the agent intends to take the benefit of the contract and does not disclose they are acting as an agent
C Where the agent acts on their own behalf although claiming to be an agentThe right answer according to ACCA is A. How reliable are ACCA’s answers as the answer according to OpenTuition is C:
ACCA have been known to get things wrong
Why are there only 3 options in your post?
This question needs a lot of thinking!
If acting within their authority, then A is correct – there’s no need to spell out the fact that you’re merely an agent for an undisclosed principal
Option C? The principal will be liable to the third party as though the agent in fact did have authority
But the principal will then seek to recover from the agent all those costs that the principal has incurred in defending their position
Technically, the agent is not liable on the contract – that liability under the contract falls on the principal.
But the principal will seek to recover from the agent.
So in this last situation it will be the principal that is liable under the contract but the principal will then have the right to recover from the agent
OK?
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