Question

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 principal 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

Hint:

Remember the Latin maxim for agency: \textit{Qui facit per alium facit per se} (He who acts through another does the act himself). This captures the essence that the agent is a mere conduit, and their actions legally bind the principal.

Answer 1

The Correct Option is A

Step 1: Understanding the Concept:
The question asks for the fundamental characteristic or "essence" of a contract of agency. An agency is a relationship where one person (the agent) is authorized to act on behalf of another (the principal) to create legal relations with third parties.
Step 2: Detailed Explanation:
Let's analyze the options: \begin{itemize} \item (A) Representative capacity coupled with a power to affect the legal relations of the principal with third persons: This is the core of agency. The agent does not act for himself but represents the principal. The most crucial aspect is that the agent's authorized acts bind the principal legally with third parties. For example, when an agent signs a contract on behalf of the principal, it is as if the principal signed it themselves. This is the correct essence of agency. \item (B) Power and title to the property that is being dealt with: This is incorrect. An agent typically does not have title to the principal's property. They only have the authority to deal with it on the principal's behalf. \item (C) Authority and status of dealing with the trade: This is too vague. While an agent has authority, their defining feature is not just dealing with trade but the ability to alter the principal's legal position. \end{itemize} The defining feature that distinguishes an agent from a mere employee or servant is this power to represent the principal and create, modify, or terminate legal relations between the principal and third parties.
Step 3: Final Answer:
The essence of a contract of agency is the agent's Representative capacity coupled with a power to affect the legal relations of the principal with third persons.