All India Bar Examination (AIBE) 5-V Previous Year Question Papers with Answers

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48.

The essence of a contract of agency is the agent’s

A: Representative capacity coupled with a power to affect the legal relations of the principle with third persons.
B: Power and title to the property that is being dealt with
C: Authority and status of dealing with the trade
D: None of the above

The answer is: A

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Explanation

The correct option is A. Representative capacity coupled with a power to affect the legal relations of the principal with third persons.

This is the essence of a contract of agency, as it implies that the agent acts on behalf of the principal and can bind the principal to contractual obligations with third parties. The agent does not act for his or her own benefit, but for the benefit of the principal. The agent also does not have any title or ownership over the property that is being dealt with, but only has authority to deal with it as per the instructions of the principal. The agent's authority and status are derived from the contract of agency, and are subject to its terms and conditions