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Which of the following statements regarding agency law is correct?
? An agent may not enforce a contract that they helped to form
? A principal may sue their agent if the third party is in breach of contract
? A third party and principal do not need to be in direct contact for a binding contract between them to
be formedANS- A third party and principal do not need to be in direct contact for a binding contract between them to be formed
Good day sir, I saw this question and got confused because both A and C seem correct to me.I’ll appreciate if you can explain better.
Hi Eunice
‘An agent may not enforce a contract that they helped to form’ The agent has no rights! The agent is merely an extension of the principal and it’s the principal that has the right to sue the third party in the event of breach. The question doesn’t, technically, make the situation specific enough. For example a person that is an agent may enter into a contract on their own behalf, not acting as an agent. And then, of course, the agent could enforce that personal contract. The question would be batter phrased with the addition of ‘An agent may not enforce a contract that they helped to form IN THEIR CAPACITY AS AN AGENT’
‘A principal may sue their agent if the third party is in breach of contract’ is clearly incorrect
‘A third party and principal do not need to be in direct contact for a binding contract between them to be formed’ is surely the point about having agents! If these two major players HAD to be in direct contact, what would be the point of having agents, and agency law?
OK?
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