Principle a Principal is Liable for Such Acts as Committed in the Course of an Agency but is Not Liable for Such Acts as Committed Outside the Course of the Agency. - Legal Reasoning

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MCQ

PRINCIPLE A principal is liable for such acts as committed in the course of an agency but is not liable for such acts as committed outside the course of the agency.

FACTS ABC, a partnership between A, B and C maintained a bank account with XYZ. As per the standing arrangement with the bank, signatures of at least two partners were required for the withdrawal of the money from the partnership account. B forged the signatures of A, which were exactly alike and withdrew a large amount of money and disappeared. In a suit brought by A and C 

Options

  • The bank will succeed as A committed wrong in the course of the agency

  • The bank will succeed as A committed a wrong outside the course of the agency

  • A and C shall succeed as the bank honoured a forged cheque

  • A and C shall succeed because they had not authorised B to withdraw money

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Solution

The bank will succeed as A committed wrong in the course of the agency

Concept: Law of Torts (Entrance Exams)
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