Which one of the following conditions does not constitute a valid agency by necessity?

Correct option is D

The condition "Destruction of the subject matter of the contract of agency" does not constitute a valid agency by necessity.

An agency by necessity arises when, in an emergency situation, an agent must act without the principal's prior consent to preserve the interests of the principal. However, the destruction of the subject matter of the agency is not one of the factors that establishes a need for acting in the principal's interest, though it may end the agency contract.

For an agency to be valid by necessity, certain key elements are essential:

1. Actual and Definite Commercial Necessity: There must be an urgent, practical need that requires immediate action, like a situation where goods need to be sold to prevent them from decaying.
2. Bona Fide Actions for the Principal's Benefit: The agent must act honestly and primarily for the benefit of the principal.
3. Reasonable and Practicable Course of Action: The agent should choose a course of action that is the most reasonable under the given emergency.

Information Booster:

Conditions for Agency by Necessity:

1. Urgency and Necessity: The agent must act in situations where it is not possible to obtain prior consent from the principal due to time constraints or other factors.
2. Good Faith and Benefit to Principal: The agent’s actions must be in good faith, aimed at preserving the principal’s interest, and not for personal gain.
3. Reasonable and Appropriate Actions: The agent should act in the most reasonable manner available under the circumstances, ensuring that their actions are justifiable.
4. Termination of Agency: Destruction of the subject matter of the agency would terminate the agency contract, but it doesn’t create a valid situation for agency by necessity.

Additional Knowledge

(a) There should have been actual and definite commercial necessity for the agent to act promptly:
This is a key condition for agency by necessity. It ensures that the agent acts in a situation that requires immediate intervention, like the sale of perishable goods.

(b) The agent should have acted bona fide and for the benefit of the principal:
This is another crucial condition for agency by necessity. The agent must act with honesty and in the best interest of the principal, rather than for personal advantage.

(c) The agent should have adopted the most reasonable and practicable course under the circumstances:
This is also a valid condition. The agent must choose the best possible course of action in an emergency situation, ensuring the principal’s interests are best served.