COMMERCIAL LAW (continued 2)

The undisclosed principal is not liable to a third party if the third party with full knowledge of the agency, elects to hold the agent. If A employs B to purchase goods for him, and B purchases the goods in his own name from C, and C, before payment, learning that the goods were purchased for A, elects to hold the agent B, by suing him for the purchase price, or by doing or saying anything that shows his determination to hold the agent, rather than the principal, he cannot thereafter hold A.

The undisclosed principal may enforce against third persons the contract of his agent. If A employs B to purchase goods from C and B makes the purchase in his own name for future delivery, A may compel C to deliver the goods to him. This rule applies in all cases where the third party is not injured by its application.

The liability of an undisclosed principal to third persons, upon contracts made by an agent in the agent's name, is subject to the further exception, that when the third party has led the undisclosed principal to believe that he is looking to the agent alone for fulfillment of the contract, and relying upon such conduct the undisclosed principal settles with the agent, he is no longer liable to the third party. In this event the third person is said to be estopped from the right to sue the undisclosed principal. This rule is based upon equitable reasons. There can be no such thing as undisclosed principal in case of a negotiable instrument. No one is liable on a negotiable instrument, such as a note, draft, or check, except the maker, indorser, drawer or acceptor.

51. Apparent Authority of Agent. While it is true that an agent must have authority from his principal, before he can bind his principal in the capacity of agent, and while it is equally true that third persons, in dealing with agents, must determine at their peril that the agent has actually received authority to act for his principal, a third party has the right to rely upon the implied and customary powers accompanying an actual authority conferred upon an agent. Few contracts are made express in all their terms. Language is not susceptible of such nicety. In the express or implied contracts used in creating agencies, many things are implied. A third person dealing with an agent, is not limited by the actual authority conferred upon the agent by his principal, if the character of the authority apparently confers other customary or implied powers. Third persons are said to have the right to rely upon the apparent rather than upon the actual authority of the agent. This does not mean that an agent can create an agency and bind his principal without having received any authority from his principal to act as agent, but means that where an authority of a certain character has been conferred upon an agent, third parties dealing with the agent, have a right to rely upon the apparent or customary powers conferred, rather than upon any secret or unexpected limitations upon such authority. For example, an agent has authority to sell silk goods and to make exchanges in silk. This authority is printed on the order sheets furnished the agent. The agent exhibits these order sheets to the customer and exchanges are made. The principal cannot claim that the agent had authority to exchange only goods of the principal's manufacture. The authority conferred upon the agent to make exchanges, apparently was to make exchanges of any silks. The principal cannot complain if third parties rely upon the apparent authority.

52. Secret Instructions. So long as the agency is legal, a principal may create an agency of as limited an extent, or of as broad a nature as he desires. So long as the limitations which the principal places upon his agent's authority are not of a nature to mislead third persons, the agent cannot bind his principal by exceeding these limitations. But if a principal confers an authority upon an agent which impliedly embraces a number of powers, the principal cannot limit these powers by secret instructions. The limitations upon an agent's apparent authority must be brought to the attention of the third party. For example, A, a wholesale dry goods dealer, may employ B, a salesman, to take written orders only. If B attempts to take oral orders, the principal, A, will not be bound thereby. But if A gives B authority to take written orders only, and secretly instructs B to take no order less than fifty dollars ($50.00) in amount, or in excess of two thousand dollars ($2,000.00), and B takes C's order for forty-five dollars ($45.00), C not knowing of this limitation, A is bound. If, however, A instructs B to take only written orders, and in amounts ranging only from fifty dollars ($50.00) to two thousand dollars ($2,000.00), and prints these conditions plainly upon the order blank, C, in signing one of these order blanks for forty-five dollars ($45.00), does not bind A. In this case, A has placed the limitation of B's authority in C's possession.

53. Wrongful Acts of Agent. An agent is personally responsible for wrongful acts committed. The fact that he acts in a representative capacity, does not excuse him from committing wrongs, nor does it relieve him from personal liability therefor. The principal, as well as the agent, is liable for the wrong committed, if authorized. If A instructs his agent, B, to sell goods by fraudulent representations and B, by means of said fraud, sells goods to C, B personally, as well as A is liable to C, for the wrongful act. In the language of the courts, an agent is liable to third parties for malfeasance, but not for misfeasance. That is, an agent is liable to a third party for wrongful acts done, but is not liable to third parties for mere failure to observe the terms of his agency. In the latter case, he is liable to his principal only.

54. Delegation of Authority and Subagents. Where personal judgment and discretion are required of an agent, he cannot transfer his duties to another, without the consent of his principal. A, a wholesale dry goods merchant, employs B, an experienced traveling salesman, to sell goods. B, by his contract, is bound to give his personal skill to A and cannot employ C to act as salesman for him. A presumptively employs B to use his own skill and judgment. B is not permitted to delegate his authority to another.

Where, however, mere mechanical or ministerial work is to be performed the agent is permitted to employ others to assist him, or to perform the work. For example, A employs B, an expressman, to carry his trunk to the depot. B may employ a boy to assist him in performing the work, or may employ another to perform the work. Usage and custom have much to do in determining whether or not an agent is permitted to delegate his authority. The performance of a mere ministerial duty may be delegated. A employs B to act as stenographer in reporting the trial of a case. When it comes to writing out the testimony, B may perform the task himself, or delegate it to another.

When an agent employs a subordinate, or delegates his authority to another on his own responsibility, the agent stands as principal for the sub-agent, and the original principal is not responsible to third persons for the acts of the sub-agent. If, however, the agent is authorized by the principal to appoint a sub-agent, the agent is bound only to exercise care in the selection of such sub-agent, and the original principal is liable to third persons for his acts. The sub-agent is answerable to the principal, and not to the agent for his acts. For example, A, a florist, employs B to deliver a box of flowers. B employs C. The nature of the duty is such that B may delegate it. But if C is negligent in the performance of the work, B is liable to A for the negligence, for the reason that A did not expressly or impliedly direct B to employ another.

A, in Chicago, deposits for collection, a check drawn on a New York bank. A knows that it is the custom of bankers to employ other banks for the purpose of making collections. If the Chicago bank uses due care in selecting another bank to assist in making the collection, and this bank makes the collection and fails before the Chicago bank receives the money, A must stand the loss, and not the Chicago bank. A authorized the employment of a sub-agent. There is some conflict of authority on the legal question involved in the above example.

55. Agent's Authority to Collect. An agent authorized to solicit orders is not thereby authorized to make collections on such orders. If, however, the agent is entrusted with the goods, and delivers them at the time the sale is made, he is authorized to receive payment therefor.

An agent authorized to sell, is not authorized to exchange or trade goods. He is authorized to make sales for cash only. If he accepts checks, or sells on credit, he is personally liable for losses. There is a tendency at present to permit the agent to accept checks in payment. The custom of making payment by check is so well recognized in many lines of business, that in some transactions it impliedly gives an agent this authority. This was not formerly the rule, and is still disputed by many courts.

56. Agent's Signature to Written Instruments. The proper method for an agent to employ in signing a written instrument, as agent, is to describe himself as agent for his principal in the body of the instrument, and then sign his principal's name at the end thereof, by himself as agent. For example, if A, is agent for B in making a contract of sale, the body of the instrument should state that "B by A, his agent, agrees," and the signature should be

(B..............) (by A, his agent)

If the contract is merely signed "A, agent," the agent probably binds himself only. This is especially true in case of sealed instruments, such as deeds. In case of promissory notes, an agent who has authority to make such instruments, may make them in the name of his principal without using his own name at all. The more common form, however, is to sign the principal's name, per the agent as agent, or to sign the agent's name as agent for the principal, giving the principal's name. The mere signing of the agent's name as agent is a mere description, and probably binds the agent and not the principal. For example, if A is agent and B the principal, a promissory note executed by the agent should be signed

(B..............) (by A, his agent)

A simple contract should state in the the body of the instrument that A, as agent for B, is making the contract, and the contract should be signed

(B..............) (by A, his agent)

or A, agent for B. A promissory note or simple contract made and signed in the name of the principal, the agent's name not appearing, is probably binding, but it is not good business practice. The exact condition of affairs should be shown, and the name of the agent, as well as that of the principal, should appear in the document.

57. Authority of Agent to Warrant. As to whether or not an agent authorized to sell personal property has implied authority to warrant its quality, is not uniformly settled. If there is any rule on the question, it probably is controlled by usage and custom. If there is a general well known custom to warrant a particular article, the agent has implied authority to warrant the quality of the article sold. If no such usage or custom exists, or if the usage or custom is purely local and not general in its application, the agent has no authority to warrant the quality of the goods sold. It must be remembered that a principal is bound by the general character of authority he confers upon his agent, by the agent's apparent authority rather than by the actual authority, unless the latter is actually brought to the notice of third parties. It has been held that an agent authorized to sell a horse is authorized to warrant the soundness of the horse, and that an agent authorized to sell reapers is authorized to warrant their durability and fitness. It was held that a principal, who authorized an agent to sell goods at a certain price, did not authorize the agent to warrant to third persons that his principal would not sell to others at a less price.

58. Factors. A factor, usually called a commission man or consignee, is an agent entrusted with possession of his principal's goods, and ordinarily empowered to sell in his own name. Like any agent who has possession of his principal's goods with power to sell, a factor has power to collect. He differs from a broker in that he has possession of the goods of his principal, and is authorized to sell in his own name, rather than in the name of his principal.

In the absence of contrary custom or express direction, a factor may sell on credit. A factor, until instructed otherwise, may use his discretion as to the time and price of sales, and is entitled to deduct his commission based upon custom in the absence of special contract.

A factor may sue the purchaser in his own name, for the purchase price. The principal may sue in his own name also. Persons dealing with factors may hold the principal responsible for the contracts and representations of the factor, the same as any undisclosed principal. Factors are also personally liable to third persons for their contracts.

A factor must account to his principal for money collected, less his commission and expenses. He is not obliged to keep such money separate from his own, but he must keep accurate account of same, and remit promptly when it is due, according to custom or special contact.

59. Brokers. A broker differs primarily from a factor in that ordinarily he does not have possession of the article dealt in, and acts in the name of his principal rather than in his own name. There are many kinds of brokers engaged in common business life. Some of these are insurance brokers, pawnbrokers, bill and note brokers, and merchandise brokers. In the absence or special authority, a broker does not have authority to collect.

60. Auctioneers. An auctioneer is a special kind of agent employed to dispose of goods to the highest bidder at a public sale.

Some states provide by statute that auctioneers must be licensed, and that they may charge only certain fees. Most licensed auctioneers are required to give bond. In the absence of statutory regulations, any person competent to perform the duties of an auctioneer may so act. An auctioneer differs from an ordinary agent in that, in some respects, he is agent for both seller and purchaser. He is agent for the seller in offering the goods for sale, and in obtaining bids. When the highest bid is received, however, and the hammer falls, he is deemed to be agent for the purchaser, with authority to complete the sale in the purchaser's name. If the contract of sale is within the Statute of Frauds and required to be in writing, the auctioneer has the authority of the purchaser to sign his name to a memorandum of sale, either by himself or through his clerk. The bidder is bound by this contract, made in his presence at the time and place of the sale.

The owner may fix such reasonable terms as he chooses, and the auctioneer must follow out the terms made by the owner. If an owner advertises the terms of the sale, bidders are deemed to have notice of these terms. These terms cannot be varied by the auctioneer. If, however, the owner publishes no special terms of sale, the auctioneer has implied authority to fix customary and reasonable terms. Bidders have the right to rely on such terms and the principal is bound by them.

In the absence of special instructions to the contrary, an auctioneer must sell for cash. He has possession of the goods, consequently has implied authority to receive payment of the price. He has no implied authority to warrant the goods. He cannot bid in his own interest. If bidders fraudulently combine not to bid against each other, for the purpose of obtaining the goods at a cheap price, no title passes to the highest bidder, by reason of the fraud.

So long as the auctioneer acts within his authority and reveals the name of his principal, he incurs no personal liability. But if he exceeds his authority in making a sale he is liable in damages to his principal. If he does not reveal the name of his principal to bidders, he is liable personally to them.

An auctioneer is entitled to recover from his principal the amount of his compensation, including disbursements and expenses incurred in the sale, care and preservation of the property. He is said to have a lien on the goods or proceeds of the sale, for his compensation. By this is meant that he has a right to retain possession of the goods until his compensation is paid, or in the case of sale, to deduct his charges from the proceeds of the sale.

When authorized to sell goods on credit, in case payments are not made when due, the auctioneer may sue in his own name. He may also sue in his own name for wrongful acts of third parties, whereby the goods are injured. The principal also may bring this action in his own name. The principal is liable for the acts of his auctioneer, committed within the actual or apparent scope of the latter's authority.

61. Del Credere Agency. An agent authorized to sell is not permitted to sell on credit, unless expressly so authorized or unless the custom or usage of the particular kind of agency impliedly carries with it this power.

Some agents are, by their contracts of agency, authorized to sell on credit, on condition that they guarantee to save their principals from losses resulting therefrom. Such an agency is called a del credere commission, and the agent is called a del credere agent. This term means that in consideration of the agreed commission or salary paid the agent, the latter agrees to pay to the principal, when due, the sums which third parties, who buy the principal's goods from the agent, fail to pay.

This agreement to indemnify the principal against losses on credits made by the agent, is regarded as an original promise on the part of the agent, and not a promise to pay the debt of another. By reason of this attitude on the part of the courts in interpreting this contract as an original promise on the part of the del credere agent to pay his own debt, and not the debt of another, the contract does not have to be in writing. (See Statute of Frauds.) For example, A, a manufacturer of farm machinery, employs B as agent to sell farm machinery on credit, on condition that B personally guarantees the sales. B sells a mowing machine to C, to be paid for within ninety days. C fails to make payment. A may sue and recover the amount of the purchase price from B.

62. Real Estate Brokers. A real estate broker is one employed to make contracts involving the sale or leasing of real property. The sale of lots, of houses and lots, and farms are common examples.

A real estate broker is seldom authorized to do more than find a purchaser or tenant, not being authorized to make the lease or contract of sale. By reason of this limitation generally placed on a real estate broker's authority, many disputes arise over real estate brokers' rights to compensation. A principal may enter into any kind of contract he desires with a real estate broker, and is liable when the broker has performed his contract, and not before. The difficulty is in determining when the broker has substantially performed his contract. If A hires B to procure a purchaser for his house and lot, and agrees to pay him 2% of the selling price when he obtains the signature of a financially responsible purchaser to a contract of sale, B is not entitled to his commission until he obtains such a party's signature to a contract. The fact that A has entered into this contract with B, does not, in the absence of an express stipulation to the contrary, prevent A from selling the property himself, or from employing as many other brokers as he pleases to attempt to make the sale.

Most brokers, however, are employed on certain terms to obtain a purchaser or tenant. If the agent succeeds in obtaining such a purchaser or tenant, the principal must pay the broker the agreed compensation. The owner cannot act unfairly by the broker. If the broker obtains a tenant or purchaser by seeking him out, and by interesting him in the property, the owner cannot avoid the payment of commission by discharging the broker and completing the deal himself. In the absence of an express agreement to give the broker a certain fixed time in which to make the sale or find a tenant, the owner may discharge the agent at any time he sees fit, just as the agent may cease his efforts at any time he chooses. The owner cannot discharge the agent just as the latter is completing the sale, in order to take advantage of the agent's efforts, without paying him the agreed compensation. The agent, in this event is held substantially to have performed his contract. Contracts with real estate brokers should be carefully drawn, and should contain express stipulations as to the powers and limitation of the broker's authority. The temptation is great on the part of both parties to claim that the sale was, or was not made, through the efforts of the broker. The contract of a real estate broker differs not at all from any other contract. The conditions are such, however, that the agreement is frequently indefinite, and it is difficult to determine when a substantial performance has been made.

In the absence of any agreed compensation, the real estate broker is entitled to receive the customary fees. In the absence of any custom regulating the commission, he is entitled to receive a reasonable compensation.

A real estate broker is not permitted to represent both parties, or to receive compensation from both parties. If a broker is promised compensation from the purchaser which he agrees to accept, without the consent of the owner, he cannot receive compensation from either party.

63. Termination of Agency. If an agent performs the terms of his agency, the agency is said to be terminated by performance. He ceases to be agent, by reason of having performed his contract.

If an agent is employed to act as agent for a specified time, the lapse of the stipulated time, of itself, terminates the agency.

An agency is a contract, express or implied, and it may be terminated at any time by any act of the parties thereto showing such to be their intention. There is one exception to this rule, and that is, that an agency coupled with an interest cannot be terminated by an act of one of the parties. This exception is discussed in a separate section.

Where an agency is terminated by failure or refusal of the principal, or agent to carry out his terms of the contract, the defaulting party is liable in damages to the other party. This does not prevent the termination of the agency however.

A CORNER IN THE NEW YORK OFFICE OF THE H. W. JOHNS-MANVILLE

Where an agency is terminated by the failure or refusal of either party to observe the conditions of the contract of agency, the agency still subsists on the part of third persons, who have dealt with the agent, and who have not received notice of the termination. Upon revoking the agent's authority, the principal must notify third persons, who have dealt with the agent, or who have knowledge of the agency contract, and who would be likely to continue to deal with him as agent. If the principal does not give third parties such notice, he is still liable to them on contracts subsequently made by the agent in the principal's name. For example, if A, a wholesale druggist, employs B to sell goods for one year and C knows of the contract, and at the expiration of six months, A discharges B for failure to give him his exclusive time, A must notify C of B's discharge, else B can still bind A by making contracts with C.

64. Revocation of Agency by Operation of Law. When one of the parties to an agency contract dies, becomes insane or bankrupt, the agency is said to terminate by operation of law. When the principal dies, the agency terminates. Death of itself, constitutes notice to third persons of the termination of the agency. This is true of all agencies except those coupled with an interest, discussed in another section. If any agent and a third person innocently make a contract in the name of the principal after the death of the principal, and without notice of the principal's death, the contract is not enforceable against the principal's estate. Death of the principal revokes the agency. Death of the agent also revokes the agency.

Insanity of the agent, or of the principal terminates an agency not coupled with an interest. It is regarded the same as death of one of the parties.

An agency is terminated by the bankruptcy of either principal or agent. Mere insolvency on the part of the principal or agent does not, of itself, terminate the agency, but bankruptcy, voluntary or involuntary, terminates it, and is of itself, notice to third persons. An innocent third person who has parted with his money on a contract made with the agent after the agency has been terminated by reason of insanity, or bankruptcy of the principal, may not enforce his contract, but may recover his money. Injury or disability of an agent, rendering it impossible for him to carry out the terms of the agency, terminates the agency.

65. Agency Coupled with an Interest. An agency coupled with an interest cannot be terminated by attempted revocation of the principal, nor is it terminated by death, insanity or bankruptcy of the principal or agent.

If the agent has an interest in the subject of the agency outside his interest in his compensation, he is said to have an agency coupled with an interest. Such an agency is irrevocable. A pays B one thousand dollars ($1,000.00) for one eighth interest in a patent, and in consideration of this purchase is given the agency to sell the patented article for a fixed commission. This constitutes an agency coupled with an interest, and is not revoked by an attempted revocation of the principal or by the principal's death. A is indebted to B, his attorney, for one hundred dollars ($100.00). A gives B a note for one hundred and fifty dollars ($150.00) to collect, agreeing to pay him 10% of the amount collected, and to permit him to deduct the one hundred dollars ($100.00) indebtedness. This constitutes an agency coupled with an interest, and cannot be revoked by A.

To constitute an agency coupled with an interest, the interest must be coupled with the subject matter of the agency, and not merely with the compensation the agent is to receive. For example, if A sends his attorney, B, a note to collect, agreeing to give B 25% of the amount collected, this does not constitute an agency coupled with an interest, and may be revoked at any time by A.

QUIZ QUESTIONS

LAW IN GENERAL

1. How many classes of rights are there?

2. Name them.

3. How did men derive these rights?

4. What limitations, if any, are there to rights?

5. Have property rights always been recognized?

6. A finds a watch in the street and, without making any attempt to find the owner, keeps it. Is the right of possession in A?

7. In primitive times were personal or property rights more generally recognized?

8. How were rights originally enforced?

9. How are rights enforced at present?

10. How did laws originate?

11. Define law.

12. What does law embrace?

13. What connection have laws with courts of justice?

14. What connection, if any, have customs to laws?

15. What is the purpose of law?

16. What class of laws is enforced for the benefit of the state?

17. A steals B's horse. B, by proper legal action, recovers possession of the horse. Is the law enabling B to recover the horse a law for protection of citizens, or for the protection of property?

18. What are the sources of law?

19. Do decisions of courts form any part of law? If so, what?

20. What are the New York State Reports?

21. What are the Philippine Island Reports?

22. Is the treaty existing between the United States and Japan, law? If so what kind of law?

23. Define statutes. How are statutes enacted?

24. To what classification of law do statutes belong?

25. Is the English Constitution written or unwritten law?

26. Do customs and statutes bear any relation to each other?

27. How is the record of the state statutes kept?

28. What are the general divisions of law?

29. Is any part of the unwritten law written?

30. Is all unwritten law written?

31. Is any written law unwritten?

32. Is unwritten law stable?

33. How, if at all, can the written law of a state or country be changed?

34. Are treaties unwritten law? How, if at all, are the records of Congress kept?

35. Give a general classification of law.

36. Is there a universally recognized classification of law?

37. Define administrative law and give an example.

38. Define public law and give an example.

39. Define private law. Classify private law.

40. Define constitutional law.

41. Define criminal law and give an example.

42. Can the heir or personal representative of a murdered man ever recover money compensation for the murder?

43. If so, is it by means of private or public law?

44. Is a criminal tried and punished by private or by public law?

45. Define law of procedure and give an example.

46. What do contracts embrace?

47. What does the word tort mean?

48. Give an example of a tort.

49. Does the same act ever constitute a breach of contract, a tort, and a crime?

50. Define commercial law.

CONTRACTS

1. Define contract.

2. Give an example of a business transaction which constitutes a contract.

3. What is the purpose of putting important contracts in writing?

4. What is meant by offer?

5. Give an example of offer.

6. A coat marked $25 is placed by a merchant in a window. Does this constitute an offer?

7. An advertisement is put in a paper advertising chairs for $7.00 each. Does this constitute an offer?

8. What is an agreement?

9. Is an agreement a contract?

10. Give an example of an agreement.

11. What is meant by acceptance?

12. Give an example of a contract having no acceptance.

13. A offers to sell B his watch for $10.00. B offers A $8.00. Is there an acceptance? Is there a contract in the above case?

14. What is a counter offer? Give an example of a counter offer.

15. What is meant by the term meeting of the minds?

16. Give an example of an acceptance not of the exact terms of the offer.

17. What is meant by mutuality?

18. Distinguish meeting of the minds and mutuality.

19. May there be an acceptance of a contract by an act? If the above question is answered in the affirmative, give an example.

20. Must an acceptance be communicated to the offer?

21. A writes B, "I will sell you my horse for $150. If I do not hear from you to the contrary by Thursday noon I will consider the horse yours." B does not reply. After Thursday noon, to whom does the horse belong?

22. Define option. Give an example of an option.

23. Does an option require a consideration to render it valid?

24. What is an element of a contract?

25. Give the elements of a contract.

26. How many parties to every contract?

27. What is meant by legal age?

28. A, a male, sixteen years old, contracts with B, a female, eighteen years old. Can B avoid the contract on the ground of the infancy of A?

29. Is fraud or duress a defense to a contract?

30. How many kinds of consideration are there?

31. Is a good consideration sufficient to support a contract?

32. Define valuable consideration.

33. Give an example of a contract which may be supported by a good consideration.

34. What is meant by a sealed instrument?

35. Is something beneficial to the promisee a sufficient consideration to a contract?

36. A promises B to pay him $100 if B will promise to work for him for one month. B promises. Is there a consideration to this contract? If so, what is it?

37. Define mutual promise.

38. Is a mutual promise a valuable consideration? Give an example of mutual promise.

39. Define past consideration. Give an example of past consideration.

40. Does a past consideration support a contract?

41. What is meant by adequate consideration?

42. Does a consideration have to be adequate to support a contract?

43. May adequacy of consideration be considered in determining whether or not fraud was used in procuring a contract?

44. Give an example of a promise to do something one is already bound to do.

45. Is a promise to do something one is already bound to do a sufficient consideration to support a contract?

46. Give an example of illegal consideration.

47. Does an illegal consideration support a contract?

48. Do all the terms of a contract have to be express?

49. Define express contract.

50. A housewife orders a sack of flour from her grocer by telephone. The flour is delivered and accepted by her. Is this an implied contract?

51. Give an example of an express contract.

52. Do any contracts have every term expressly set forth?

53. Define implied contract.

54. Are uncertain contracts void or voidable? Give an example of an uncertain contract.

55. Give the distinction between unilateral and bilateral contracts.

56. A promises to sell his dog to B if B will promise to pay him $5.00 the following day. B promises to pay A $5.00 the following day. Is this contract unilateral or bilateral?

57. A promises to pay B $100 if B will dig a well for A. B digs the well. Is the contract unilateral or bilateral?

58. Distinguish executory and executed contracts.

59. A promises to pay B $5,000 if B will deliver to him a deed of his farm. B delivers the deed. Is the contract executed or executory?

60. Is the above contract executed as to A? Is it executory as to B?

61. Are infants bound by their contracts? Define infant.

62. Are infants' contracts void?

63. Distinguish void and voidable.

64. Can a competent party contracting with an infant avoid the contract on the ground of infancy of the other party?

65. Can an infant ratify a contract after becoming of legal age?

66. Explain how, if at all, an infant may ratify his contracts.

67. Define the term necessaries.

68. A, an infant, has not sufficient clothing. B, a merchant, sells him a coat worth $7.00, for $14.00. Can B recover anything from A? If so, how much?

69. Is an infant entitled to receive his wages?

70. What is meant by emancipation of an infant? Is emancipation of an infant ever implied?

71. What is meant by novation? Give an example of novation.

72. Are contracts made for the benefit of a third person enforceable by such third person?

73. Are contracts of an insane person enforceable?

74. Are contracts of insane persons, intoxicated persons, and idiots void or voidable?

75. A, while intoxicated, purchased a coat from B for $10.00. The following day, when sober, A promises to pay for the coat. Can B enforce the contract?

76. Can an insane person make a valid contract during a lucid interval?

77. Can married women enter into contracts?

78. Do custom and usage ever enter into a contract?

79. A purchases forty barrels of yellow grease from B, like sample furnished. The grease arrives, ranging in color from white to black. B offers to show a custom among grease dealers, known to A, that a composite sample is used in selling grease. Can he show this custom as part of the contract?

80. Are oral contracts ever valid? Why, if at all, do some contracts have to be in writing?

81. What is meant by the statute of frauds?

82. When and where did this statute originate? What was the purpose of this statute?

83. Does the statute serve any useful purpose at the present time?

84. Do the states of this country have a statute of frauds, or is it a part of their unwritten law?

85. By the terms of the statute of frauds what contracts must be in writing?

86. Are contracts covered by the Statute of Frauds illegal if not in writing?

87. A orally promises B to work for him for two years for the consideration of $2,000. Can either party enforce the contract?

88. What is meant by the term specialty? Are specialties included in the Statute of Frauds?

89. Can you make an oral promissory note?

90. Can contracts be made by letter and telegraph?

91. A, by letter, offers B $1,000 for B's team of horses. B mails a letter of acceptance which is lost in the mails. Is there a valid contract?

92. A, by letter, offers B $10 for a harness. By the following mail, A writes revoking the offer. B receives the letter of revocation five minutes after mailing his acceptance. Is the contract revoked?

93. A, by letter, offers B $1,000 for his racing horse and says, "I will consider my offer accepted upon receipt of your reply." B's letter of acceptance is lost in the mail. Is there a valid contract?

94. A wires B that he will pay him $100 per share for his Pennsylvania Railroad stock. B hands his telegram of acceptance to the telegraph operator who fails to send it. The following day A wires a revocation of his offer. Is there a valid contract?

95. Does a revocation by wire or letter have to be received to be effected?

96. Does an acceptance by wire or letter have to be received by the offerer to constitute a valid acceptance?

97. In what respect do sealed instruments differ from ordinary contracts?

98. At present what constitutes a seal?

99. At present is it the tendency of the law to favor sealed instruments?

100. Are Sunday contracts void or voidable?

101. What makes Sunday contracts unenforceable?

102. What was The Lord's Day Act of England?

103. What is meant by works of charity and necessity?

104. A makes and delivers a promissory note to B for $100 on Sunday. Is the note enforceable?

105. What makes a contract illegal?

106. Are illegal contracts void or voidable? Give an example of an illegal contract?

107. What is a gambling contract?

108. Are gambling contracts void?

109. Why are gambling contracts illegal?

110. Define fraud.

111. Is a false representation made during the formation of a contract known by both parties to be false, a defense to the contract?

112. Give an example of a false misrepresentation which will serve to avoid a contract?

113. Can there be duress without personal violence? Define duress.

114. Give an example of duress.

115. Do duress and fraud render a contract void or voidable?

116. Define mistake in connection with making a contract. Define mistake of fact.

117. Define mistake of law.

118. Does mistake of one party to a contract avoid the contract?

119. Does mistake of law avoid a contract?

120. Does mutual mistake render a contract void or voidable?

121. What is meant by a contract impossible of performance? Give an example of a contract impossible of performance.

122. A, on April 4, enters into a contract dated April 2, by which he promises to deliver to B within twenty-four hours, five tons of coal. Is A liable on this contract?

123. Do floods, earthquakes, or lightning preventing performance excuse performance?

124. Is a party to a contract excused from performance by reason of a strike?

125. May a party to a contract stipulate against strikes and Acts of God in such a manner as to avoid liability therefor?

126. If a party to a contract renders performance impossible can he force performance?

127. What is meant by conflict of law?

128. Does the law of the place where a contract is made, or the law of the place where the contract is enforced, prevail?

129. If a contract is made in one place, to be performed in another, the law of which place prevails in the interpretation of the contract?

130. What is meant by assignment of a contract?

131. A, a singer, contracts to sing at B's opera house for one week. Can A assign her contract to C, another singer? Can B assign his contract to D?

132. What is meant by giving notice of assignment?

133. Is an assignment a contract?

134. What are the elements of a valid assignment?

135. Does an assignment require a consideration?

136. Write an assignment of a simple contract.

137. Define several liability.

138. Can a party be jointly and severally liable on the same contract?

139. If two parties are jointly liable on a contract can one of them be sued thereon without the other?

140. If two parties are severally liable on the same contract, can both be sued together thereon?

141. Define liability in solido. Give an example of liability in solido.

142. How may a contract be discharged by performance? Give an example of a contract discharged by performance.

143. What is meant by tender? What constitutes legal tender?

144. Does United States statute or a state statute make certain money legal tender?

145. What kinds of money constitute legal tender?

146. A owes B $5.00. He tenders him the amount in nickels. Is the tender good?

147. A owes B $500.00. He tenders him a certified check for the amount. Is the tender good?

148. Can a contract be discharged by a subsequent agreement?

149. A agrees to dig a well for B for $10.00. Before A starts work, B changes his mind, and offers A $1.00 in settlement. Is the contract discharged if A accepts the $1.00?

150. Define warranty.

151. Give an example of warranty to a contract. 152. Does breach of warranty discharge the contract?

153. Does breach of warranty give rise to an action for damages?

154. Define rescission.

155. Give an example of rescission.

156. Define statu quo.

157. Define breach of contract.

158. Give an example of breach of contract.

159. In case of breach of contract must the other party wait until the time for performing the entire contract elapses, or may he sue at once?

160. Define bankruptcy.

161. By what kind of law is bankruptcy regulated?

162. Does bankruptcy discharge a contract?

163. Define voluntary bankruptcy.

164. Who may become a voluntary bankrupt?

165. Define involuntary bankruptcy. Who may become an involuntary bankrupt?

166. Define act of bankruptcy.

167. Enumerate acts of bankruptcy.

168. At common law could one party to a contract compel another to perform it specifically? Under present law can a contract for sale of personal property be enforced specifically?

169. What is the measure of damages for failure to deliver merchandise under a contract of sale?

170. How did the court of equity originate?

171. Are juries used in courts of equity?

172. What classes of cases are tried in equity?

173. Does a court of equity have jurisdiction of a case where there is a plain and adequate remedy at law?

174. With what kind of contracts is equity especially concerned?

175. Give an example of a contract which may be enforced specifically by a court of equity.

176. Write a form for a simple contract between A and B for the sale of a horse.

PRINCIPAL AND AGENT

1. What is meant by the term agency?

2. Give an example of a transaction completed by an agent.

3. Is there a limitation upon the kinds of business which may be transacted by an agent?

4. Distinguish principal and agent from master and servant.

5. Define and give an example of principal.

6. Define and give an example of agent.

7. Define and give an example of agency.

8. Define infant.

9. Is a married woman seventeen years of age an infant?

10. May an infant be a principal?

11. Define and distinguish void and voidable contracts.

12. May an idiot, insane, or drunken person act as principal?

13. May a corporation or partnership transact business through agents?

14. May a child eight years of age act as agent?

15. In general, what persons may act as agents?

16. May a person act as agent who is not capable of acting for himself?

17. May a person whose interests are opposed to those of his principal act as agent?

18. May corporations or partnerships serve as agents?

19. Must an agent's authority to act as agent be in writing?

20. May an agent be appointed or authorized to act by implied contract?

21. Define and give an example of implied contract.

22. What is meant by ratifying an act of an agent.

23. Give an example of a principal's ratification of an unauthorized act of an agent.

24. Give an example of a contract of agency which must be in writing.

25. Why must some contracts be in writing?

26. What are the principal provisions of the Statute of Frauds?

27. Must contracts of agency authorizing an agent to complete a land transfer be in writing?

28. Must a contract authorizing an agent to procure a purchaser for a house and lot be in writing?

29. Can a third party rely upon the statements of an agent that he has authority to act as agent?

30. May a person do through an agent anything which he may lawfully do by himself?

31. A employs B to purchase votes for an act pending in a state legislature. Is A or B, or both, guilty of a crime?

32. A employs B to paint a picture, and B employs C to paint the picture. Must A accept the work of C?

33. What things are necessary to enable a person to ratify the acts of an alleged agent?

34. May a forgery be ratified?

35. Give a classification of agents.

36. A is employed to deliver a package for B. What kind of an agent is B?

37. Give an example of a universal agent.

38. Enumerate the duties a principal owes his agent.

39. A employs B to work in his garden. B works for ten days, no compensation having been agreed upon. How much, if anything, can B recover from A?

40. If an agent abandons his agency before the time of his agency expires, can he recover anything for work performed? If so, how much?

41. What duty, if any, does a principal owe to his servant as to furnishing a safe place in which to work?

42. What rules, if any, does a servant assume?

43. In general, what are the liabilities of a principal to third persons who deal with an agent?

44. Is a principal liable to a third person who has dealt with an agent, who acted within the apparent but not the actual scope of his authority?

45. Is a principal liable to third persons for lots committed by an agent within the scope of the agent's authority?

46. Give an example of a lot or private wrong committed by an agent while acting for his principal, for which the principal is not liable.

47. Enumerate, in general, the duties an agent owes his principal.

48. Is an agent liable to his principal for mistakes of judgment or discretion?

49. Is an agent who acts without compensation ever liable to his principal for negligence? If so, give an example.

50. Enumerate, in general, the liabilities of an agent to third persons with whom he deals.

51. A, an agent for B, sells goods to C, in his own name. C afterwards discovers that A is agent for B. Can C hold A?

52. If an agent procures a contract for his principal by means of fraud is the agent liable personally on this contract?

53. If an agent, believing he has authority to act as an agent, where in fact he does not, reveals all the facts of his agency to a third party with whom he is dealing, is he liable personally to such third party if it turns out that he acted without authority?

54. Define and give an example of undisclosed principal.

55. Is an undisclosed principal when discovered, liable for the acts of his agent?

56. Is an agent of an undisclosed principal personally liable to third persons for acts of agency after the undisclosed principal is discovered?

57. May there be an undisclosed principal to a negotiable instrument?

58. What is meant by apparent authority of an agent as distinguished from actual authority?

59. Give an example of an agency where the apparent authority of the agent conflicts with the actual authority.

60. If an agent appears to have authority to act for another, but in fact never received any authority, can third persons rely upon his apparent authority?

61. Do customary powers belonging to an agent come within the meaning of apparent authority?

62. May a principal limit an agent's apparent authority by printing limitations in the agent's order sheet and in making contracts with third persons? If so, give an example.

63. Define and give an example of secret instructions.

64. Can a principal evade responsibility to third persons by secret instructions given to an agent?

65. If a third party dealing with an agent knows of the secret instructions, is he bound by them?

66. Define and give an example of sub-agent.

67. Is a sub-agent responsible to the agent?

68. Is an agent ever responsible for the acts of a sub-agent?

69. What matters, if any, may an agent delegate?

70. Define and give examples of mechanical and ministerial duties.

71. Distinguish an agency requiring personal skill, discretion, and judgment, from one requiring the performance of ministerial or mechanical duties.

72. When, if at all, is an agent authorized to collect?

73. Is an agent authorized to sell goods, always authorized to collect for them?

74. Is an agent authorized to collect, authorized to take checks?

75. How should an agent authorized to sign a written instrument for his principal, sign?

76. May an agent authorized to sign a promissory note for his principal, sign his principal's name without his own?

77. An agent authorized to sign a written contract for his principal signs his own name followed by the word, agent; e.g., "A, Agent." Is the principal bound?

78. When, if at all, is an agent authorized to warrant the quality of personal property sold?

79. Define warranty.

80. Give an example of an agent who is impliedly authorized to warrant.

81. Do usage and custom have anything to do with the agent's implied authority to warrant?

82. Define factor, and give an example.

83. Do factors have possession of the goods?

84. Do factors have implied authority to collect?

85. Do factors have the right to sell goods in their own name?

86. Is a commission merchant a factor?

87. Define broker.

88. Distinguish broker and factor.

89. Give an example of broker.

90. Is a real estate agent a broker, or a factor?

91. In what respect, if any, does an auctioneer differ from an ordinary agent?

92. What is meant by licensed auctioneers?

93. Are auctioneers' fees ever regulated by statute?

94. What is meant by auctioneer's lien?

95. When, if at all, may an auctioneer sell on credit?

96. May an auctioneer make his own terms of sale? Are all third persons bound by the terms advertised?

97. Define and give an example of del credere agent.

98. Must a del credere agent receive a separate consideration for his guaranty?

99. When is a real estate agent entitled to receive his commission?

100. Does the contract of a real estate broker differ from the contract of any other agent?

101. How may an agency be terminated?

102. Give an example of an agency terminated by lapse of time, and of one terminated by act of parties.

103. May all agencies be terminated at the will of the parties?

104. What is meant by notice to third persons of termination of an agency, and when, if at all, is this notice necessary?

105. Explain termination of agency by operation of law.

106. In case of termination of agency by death of principal must third parties be notified?

107. Does injury or liability of an agent ever terminate an agency? If so, under what circumstances?

108. Define agency coupled with an interest.

109. Is an agency coupled with an interest revocable at the will of either party?

110. A employs an agent at a salary of one hundred dollars per month, promising him 1% commission in addition, on all orders taken in excess of $1,000 per week. Is this an agency coupled with an interest?

111. Give an example of an agency coupled with an interest.

CHAMBER OF COMMERCE, CHICAGO, ILL.