Question 2 (a).docx - Question 2(a Madam Choo instructed...

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Question 2 (a) Madam Choo instructed her agent Luqman to buy a house in Putrajaya for her. Luqman decided to purchase a fire insurance for the house even though there was no instruction from Madam Choo to do so. When he told Madam Choo about the insurance, she requested for time to consider whether to accept the contract for the insurance or not. She ratified the insurance 3 months after the contract was made but by that time, the house had already been destroyed by a fire. Advise Madam Choo. Issue: Whether there must be a real and actual emergency? Whether Luqman was entrusted with the Madam Choo’s property or goods? Whether imposible for the Luqman to get the Madam Choo’s instruction at that time? Introduction Agency, being a form of a contract, is governed by the Contract Act 1950. In section 135 said that agent as a person employed to do any Act for another or to represent another in dealing with third persons. Its further states that the person for whom such act is done, or who is so represented, is called the ‘principal’. Agency can be created by contract like express or implied, oral or written, by confirmation such as an agreement is given either to an act done by someone who had no previous authority to act or to an act that exceeded the authority granted to an agent, by estoppel or principle its explain where a person allows another to act for him or her to such an extent that a third party reasonably believes that an agency relationship exists, or necessity or requirement of a person where acts for another in an emergency situation without express authority to do so. The principle that can be used in this case is Agency by Necessity. It is because the principal Madam Choo employed the agent Luqman to be her representative on her behalf to buy a house in Putrajaya. Agency by Necessity are

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