TRUE or FALSE

1. To hold the principal liable, every person dealing with an agent is under obligation
to make inquiry not only as to existence of the agency but also as to the nature and
EXTENT of authority of the agent whether the authority was made in writing or not.
2. A third person cannot set up the fact that the agent has exceeded his power only
after the principal has ratified the agents act.
3. A third person can set up the fact that the agent has exceeded his power before
such ratification even when the principal has signified his WILLINGNESS to ratify.
4. A third person has a duty to require the agent to produce his power of attorney to
ascertain the scope of his authority. Hence, he is bound to inquire as to EXTENT of
agent's authority for ignorance of the agent's authority is no excuse. Furthermore,
the third person may also. Ask for the INSTRUCTIONS of the principal as regard to
the agency.
5. A commission agent is one who BUYS and sells goods or chattels consigned or
delivered to him by his principal for a compensation known as COMMISSION.
6. A commission agent is merely an intermediary between the buyer and the seller
and has NO relation to the property.
7. A commission agent is not responsible for the damages or deteriorations suffered
by the goods under consignment if upon RECEIVING goods, the commission agent
orally communicates to the principal that the goods received by him do not agree
with the description in the consignment.
8. The third person is chargeable with knowledge of the terms of power of attorney
as written and the INSTRUCTIONS disclosed to him.
9. Since the relation of an agent to his principal is fiduciary in character, a principal
is bound by the contract of his agency only should the agent exceed his power. It
enables the activity of man which is limited in its exercise by his physiological
conditions to be extended, permitting him to perform diverse juridical acts through
another.
10. If the authority of the agent is in writing, third person is not required to inquire
further than the terms of the written power of attorney.
11. P employed A under a power of attorney to sell the former's land for not less
than P14,000,000. A has no power to sell the property for less than P14,000,000. A's
statement to B ( buyer ) that he was authorized to sell at a lower price is not binding
upon P.
12. P authorized A to sell the former's land for any reasonable amount, with a secret
instruction to sell at NOT LESS THAN P14,000,000. A sold the property to T

( buyer) for P13,500,000. P is bound by the sale, his liability being based on the
apparent authority of A.
13. The commission agent who handles goods of the same kind and mark, which
belong to different owners, shall distinguish them by countermarks, and designate
the merchandise respectively belonging to each principal.
14. A third person is not bound and cannot be affected by the private or secret
orders and INSTRUCTIONS of the principal.
15. A Third person cannot prejudiced by any understanding between the principal
and the agent.
16. If the principal ratifies the contract in which the agent has exceeded his power,
it is the same effect as if he ORIGINALLY authorized it.
17. A factor or commission agent is one whose business is to receive and sell goods
for a commission and who is entrusted by the principal with the POSSESSION of
goods to be sold.
18. An act of agent within the terms of the power of attorney as written is within the
scope of the agent's authority although the agent has in FACT exceeded the limits
of his actual authority according to the secret understanding between the principal
and the agent.
19. P gave A a written power of attorney wherein A is authorized to sell P's factory
for such price and upon such terms and conditions as A may deem reasonable.
However, P and A had an understanding to the effect that A should sell the factory
for not less than P14,000,000. A who has acted within the scope of his authority,
sold the factory to B for P13,500,000. P is bound by the sale.
20. Principal is bound by the contract of his agent if the later exceed his power.

Key to correction
1. FALSE, article 1900, p. 303, The Law on Sales, Agency and Credit Transactions
2013 Edition.
2. FALSE, article 1901, p. 304, The Law on Sales, Agency and Credit Transactions
2013 Edition.
3. FALSE, article 1901, p. 304, The Law on Sales, Agency and Credit Transactions
2013 Edition.
4. TRUE, article 1902, p. 306, The Law on Sales, Agency and Credit Transactions
2013 Edition.
5. TRUE, p. 512, Notes to business law, Fidelito K. Soriano 2014 Edition.
6. FALSE , p. 512, Notes to business law, Fidelito K. Soriano 2014 Edition.
7. FALSE, article 1903, p. 306, The Law on Sales, Agency and Credit Transactions
2013 Edition.
8. TRUE, article 1902, p. 305, The Law on Sales, Agency and Credit Transactions
2013 Edition.
9. FALSE, article 1902, p. 305, The Law on Sales, Agency and Credit Transactions
2013 Edition.
10. TRUE, article 1900, p. 303, The Law on Sales, Agency and Credit Transactions
2013 Edition.
11. TRUE, article 1902 p 306, The Law on Sales, Agency and Credit Transactions
2013 Edition.
12. TRUE, article 1902 p 306, The Law on Sales, Agency and Credit Transactions
2013 Edition.
13. TRUE, article 1904, p. 307, The Law on Sales, Agency and Credit Transactions
2013 Edition.
14. TRUE, article 1902 p 305, The Law on Sales, Agency and Credit Transactions
2013 Edition.

15. TRUE, article 1902 p 305, The Law on Sales, Agency and Credit Transactions
2013 Edition.
16. TRUE, article 1901. P. 304, The Law on Sales, Agency and Credit Transactions
2013 Edition.
17. TRUE, article 1903. P306, The Law on Sales, Agency and Credit Transactions
2013 Edition.
18. TRUE, article 1900 p304, The Law on Sales, Agency and Credit Transactions
2013 Edition.
19. TRUE, article 1900 p 304, The Law on Sales, Agency and Credit Transactions
2013 Edition.
20. FALSE, article 1901. P 304, The Law on Sales, Agency and Credit Transactions
2013 Edition.