CMA Intermediate · Business Laws and Ethics · Special Contracts - Indemnity and Guarantee; Bailment and Pledge; Laws of Agency
Under the Indian Contract Act, 1872, the person who delegates authority to another to do an act or to represent him in dealings with third persons is called the:
The person who employs another to do an act for him or to represent him in dealings with third persons is called the principal. The person so employed is the agent. Surety relates to guarantee and bailor to bailment, so they are not correct.
- APrincipalCorrect
- BAgent
- CBailor
- DSurety
Explanation
In the law of agency, the person who employs another to act for him or represent him in dealings with third persons is the principal, and the person so employed is the agent. Surety and bailor belong to guarantee and bailment respectively.
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