What does the Act say about consideration for creating an agency?
AIt must be adequate in value
BIt must be paid in advance
CNone is necessary for agency
DThe agent must supply it
Answer & Solution
Correct answer: C. None is necessary for agency
Section 185 makes an agency valid without any consideration, unlike an ordinary contract.
Keep practising Agency
Browse all Agency questions for CA Foundation, or explore more Businesslaw topics.
Related questions
An agent for sale makes an unauthorised misrepresentation and C buys. The contract isFrauds by agents in matters outside their authorityA tells B not to sell below a set price, but C, unaware, buys below it from B. A isA principal who made third persons believe an agent's acts were authorised isA person who contracted as agent but really acted on his own accountA person untruly claims to be an agent and no ratification follows. He mustA third party induces belief that only the principal is liable. He laterA sells cotton to B and later learns B was agent for C. A may sue