LAW OF AGENCY-FINAL ACTUAL EXAM PAPER 2026
QUESTIONS WITH ANSWERS GRADED A+
● Agency. Answer: Legal relationship where one party acts on behalf of another
● Principal. Answer: Person who authorizes an agent to act on their behalf
● Agent. Answer: Person authorized to act on behalf of the principal
● Fiduciary Duty. Answer: Legal obligation of agent to act in the principal's best interest
● Express Agency. Answer: Agency created by explicit written or verbal agreement
● Implied Agency. Answer: Agency created by conduct or circumstances rather than explicit
agreement
● Apparent Agency. Answer: Agency created when principal leads third party to believe
agency exists
● Agency by Ratification. Answer: Principal approves an unauthorized act performed by
agent
● Agency by Estoppel. Answer: Principal prevented from denying agency due to their own
conduct
● Universal Agent. Answer: Agent with broad authority to act in all matters for principal
● General Agent. Answer: Agent authorized to conduct a series of transactions for principal
● Special Agent. Answer: Agent authorized for a single specific transaction
● Subagent. Answer: Agent appointed by an agent to assist in performing duties
● Gratuitous Agent. Answer: Agent who acts without compensation
● Power of Attorney. Answer: Written document granting agent authority to act for principal
● Durable Power of Attorney. Answer: Power of attorney that survives incapacity of the
principal
● Limited Power of Attorney. Answer: Restricted grant of authority for specific acts only
, ● Actual Authority. Answer: Authority expressly or impliedly granted by the principal to the
agent
● Apparent Authority. Answer: Authority agent appears to have based on principal's
conduct
● Inherent Authority. Answer: Authority agent has due to the nature of their position
● Emergency Authority. Answer: Agent's power to act beyond normal scope in urgent
situations
● Scope of Authority. Answer: Boundaries within which agent is permitted to act
● Undisclosed Principal. Answer: Principal whose existence is unknown to the third party
● Partially Disclosed Principal. Answer: Third party knows an agent exists but not who the
principal is
● Disclosed Principal. Answer: Third party knows both the agent and principal's identity
● Respondeat Superior. Answer: Doctrine holding employer liable for employee's acts within
scope of employment
● Vicarious Liability. Answer: Principal's liability for authorized acts of the agent
● Independent Contractor. Answer: Person who performs work but is not an employee or
agent
● Employee vs Agent Distinction. Answer: Employees are controlled by employer; agents
act on behalf of principal
● Duty of Loyalty. Answer: Agent must act solely in principal's interest avoiding conflicts
● Duty of Care. Answer: Agent must perform duties with reasonable skill and diligence
● Duty to Obey. Answer: Agent must follow lawful instructions of the principal
● Duty to Account. Answer: Agent must keep accurate records and account for all money
received
● Duty to Communicate. Answer: Agent must inform principal of all relevant information
● Duty of Confidentiality. Answer: Agent must protect principal's confidential information
QUESTIONS WITH ANSWERS GRADED A+
● Agency. Answer: Legal relationship where one party acts on behalf of another
● Principal. Answer: Person who authorizes an agent to act on their behalf
● Agent. Answer: Person authorized to act on behalf of the principal
● Fiduciary Duty. Answer: Legal obligation of agent to act in the principal's best interest
● Express Agency. Answer: Agency created by explicit written or verbal agreement
● Implied Agency. Answer: Agency created by conduct or circumstances rather than explicit
agreement
● Apparent Agency. Answer: Agency created when principal leads third party to believe
agency exists
● Agency by Ratification. Answer: Principal approves an unauthorized act performed by
agent
● Agency by Estoppel. Answer: Principal prevented from denying agency due to their own
conduct
● Universal Agent. Answer: Agent with broad authority to act in all matters for principal
● General Agent. Answer: Agent authorized to conduct a series of transactions for principal
● Special Agent. Answer: Agent authorized for a single specific transaction
● Subagent. Answer: Agent appointed by an agent to assist in performing duties
● Gratuitous Agent. Answer: Agent who acts without compensation
● Power of Attorney. Answer: Written document granting agent authority to act for principal
● Durable Power of Attorney. Answer: Power of attorney that survives incapacity of the
principal
● Limited Power of Attorney. Answer: Restricted grant of authority for specific acts only
, ● Actual Authority. Answer: Authority expressly or impliedly granted by the principal to the
agent
● Apparent Authority. Answer: Authority agent appears to have based on principal's
conduct
● Inherent Authority. Answer: Authority agent has due to the nature of their position
● Emergency Authority. Answer: Agent's power to act beyond normal scope in urgent
situations
● Scope of Authority. Answer: Boundaries within which agent is permitted to act
● Undisclosed Principal. Answer: Principal whose existence is unknown to the third party
● Partially Disclosed Principal. Answer: Third party knows an agent exists but not who the
principal is
● Disclosed Principal. Answer: Third party knows both the agent and principal's identity
● Respondeat Superior. Answer: Doctrine holding employer liable for employee's acts within
scope of employment
● Vicarious Liability. Answer: Principal's liability for authorized acts of the agent
● Independent Contractor. Answer: Person who performs work but is not an employee or
agent
● Employee vs Agent Distinction. Answer: Employees are controlled by employer; agents
act on behalf of principal
● Duty of Loyalty. Answer: Agent must act solely in principal's interest avoiding conflicts
● Duty of Care. Answer: Agent must perform duties with reasonable skill and diligence
● Duty to Obey. Answer: Agent must follow lawful instructions of the principal
● Duty to Account. Answer: Agent must keep accurate records and account for all money
received
● Duty to Communicate. Answer: Agent must inform principal of all relevant information
● Duty of Confidentiality. Answer: Agent must protect principal's confidential information
