ACCA Applied Skills · Corporate and Business Law (Global) · Agency law
A shipping company's cargo of perishable fruit is stranded at a port after the owner cannot be contacted. Tomas, the ship's master, sells the fruit locally to avoid it rotting, acting in the owner's best interests. Which condition is NOT required for a valid agency of necessity?
Prior agreement by the principal is not required. Agency of necessity arises by operation of law where there is a genuine emergency, instructions cannot be obtained, and the agent acts in good faith in the principal's interests.
- AIt was impossible to get the principal's instructions
- BThe agent acted bona fide in the interests of the principal
- CThere was a genuine emergency requiring action
- DThe principal had previously agreed to the agent acting in emergenciesCorrect
Explanation
Agency of necessity arises without any prior agreement. It requires a genuine emergency, impossibility of obtaining instructions, and bona fide action in the principal's interests (with action being reasonable). Prior consent is not needed, so that option is the one that is not required.
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