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Ask the Tutor ACCA LW

Agent

AAynur1mo ago

Hello sir, I’m confused about this question. I know the other options are incorrect, but I also don’t want to choose option 2 because I noted the rules this way:

  1. Disclosed principal → the principal is liable.

  2. Unidentified principal → the principal is liable.

  3. Undisclosed principal → either the agent or the principal may be liable.

Could you please correct me and explain where I went wrong?

In the context of the law of agency, an agent will NOT be liable for a contract in which of the following instances?

MikeLittleMikeLittleTutor1mo ago#1

Option 1, the agent will not be liable. The contract with a customer is effectively a contract between the customer and the principal. Agent has no liability nor any rights under the contract

Option 2, Primarily the principal is liable. However, the agent may exceptionally be held liable if the agent refuses to identify, when asked, the principal.

Option 3, Where the third party does not realise that the agent is acting under an agency agreement for a principal (ie the principal is undisclosed) then the agent will likely be held liable. The principal may be held liable on subsequent disclosure.

Does that answer you?

AAynur28d ago#2

Yes sir, I get it now. My problem was with point 3, but I understand it now. Thank you so much!

MikeLittleMikeLittleTutor28d ago#3

As always, you're very welcome

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