Which one of the following conditions does not constitute a valid agency by necessity?

Question

Question

This question was previously asked in

UGC NET Paper-2: Commerce 25th Dec 2021 Shift 1

There should have been actual and definite commercial necessity for the agent to act promptly.
The agent should have acted bonafide and for the benefit of the principal.
The agent should have adopted the most reasonable and practicable course under the circumstances.
Destruction of the subject matter of the contract of agency.

Answer 1

The correct answer is Destruction of the subject matter of the contract of agency.

Key Points Agency Contract:

An agency contract is a legal relationship, where one person appoints another to transact on his behalf.
The contract person who appoints another person to look after his transactions is called the original person.
Whereas the person who sees any transaction of the original person is the agent.

Important Points

The agency is contractual.
There is a special contract under the Indian Contract Act 1872.
According to this contract, if the subject matter of the contract of the agency is lost, it cannot be a valid agency.
It is absolutely necessary to have the subject matter in the agency for a contract.