Question

If the principal comes to know the agent has concealed from him any material fact, the principal _____________.

• A. may affirm such transaction
• B. may claim damages
• C. may repudiate the transaction
• D. all of the above

Answer 1

Answer: (D)

all of the above

D.

The contract of agency states that the principal has the power to repudiate the acts of the agent in case the agent has concealed any material facts. He also has the power to affirm his acts and to claim the damages from him , if any. Insurance contract is no exception.

In this case also the principal may ratify the acts of the agent or repudiate them. It should be however noted that insurance is a contract of utmost good faith.