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Monday 11 May 2020

Indian Contract Act: Short Q and A: Part 2

Hello friends. This is one more article on short question and answer on contract law in India. Please read this blog for study purpose only.

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Image Credit: contractlawjl.weebly.com
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Q 1. How it can be proved that the agent is having apparent authority or not?
A. If the agent is acting outside the course of authority given to him in front of third party in presence of his principal and for such acts of the agent the principal remains silent then it is deemed that the agent is having apparent authority.

Q 2. How actual authority and apparent authority of an agent can be distinguished?
A. If there is some act or some knowing omission on the part of the principal then acts of agent can be deemed as outside the course of actual authorities delegated to agent by his principal. If agent acts outside his actual authority in presence of his principal and principal do not dissuade such acts by saying nothing or by remaining silent then the third party will understand that the agent is having apparent authority on behalf of his principal.

Q 3. What is lingering apparent authority?
A. Apparent authority can also occur where a principal terminates the authority of an agent, but does not inform third parties of this termination. This is called lingering apparent authority.

Q 4. How liability can be avoided in case of lingering apparent authority ?
A. Business owners can avoid being liable by giving public notice of the termination of authority, and by contacting any individual third parties who would have had reason to know of such authority.

Q 5. Which sections of Indian Contract Act, 1872 describe about contracts of indemnity and contracts of guarantee?
A. Section 124 to 147 of Indian Contract Act, 1872.

Q 6 Define the contract of indemnity as per Section 124 of ICA, 1872.
A. A contract of indemnity is a contract by which one party promises to save other party from loss caused to him by the conduct of the promisor himself or by conduct of any other person.

Q. 7 Who is indemnifier?
A. The person who promises to make good the loss or to indemnify is called indemnifier.

Q 8 Who is indemnified or indemnity holder?
A. The person whose loss is made good is called indemnified or indemnity holder.

Q 9 A mistake of law always leads to a valid contract. True or False?
Ans: The statement is False. A mistake of India law if is regarded as a valid contract since ignorance of the law is not a good enough excuse. But a mistake of foreign law is considered as a mistake of fact, and if such a mistake is bilateral it will lead to a void contract.

Q 10. Define Expressly void agreements.
A. There are certain agreements which are declared void by law, such agreements are called expressly void agreements.

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