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ACCA Applied Skills · Corporate and Business Law (Global) · Agency law

Marta runs a small business and asks her friend Jonas to sell a batch of her handmade furniture to buyers at a market, telling him to agree sales on her behalf. Which statement best describes Jonas's role?

Jonas is an agent. He has authority to make sales contracts that bind Marta to buyers, which is the essence of agency. Lack of employment status does not matter, and helping sell goods does not make him a partner sharing in the business.

  1. AHe is an agent, because he has authority to create contracts between Marta and third partiesCorrect
  2. BHe is an independent contractor, because he is not an employee of Marta
  3. CHe is a partner, because he is helping to carry on Marta's business

Explanation

An agent is a person authorised to act for a principal so as to create or affect legal relations between the principal and third parties. Jonas can make contracts binding Marta, so he is an agent. Being a non-employee does not prevent agency, and helping with sales does not create a partnership, which needs a business carried on in common with a view to profit.

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