Question: Question 7 a) How does an agency relationship arise? (5 marks) b) Scooty Mills, stockbroker, was instructed by his principal to sell off all his

Question 7

a) How does an agency relationship arise? (5 marks)

b) Scooty Mills, stockbroker, was instructed by his principal to sell off all his American stock the moment it was confirmed that the US initiated a trade war with China. When this was announced over news globally, Scooty delayed in doing so which resulted in his principals American stock falling drastically in price, causing him to lose millions in a matter of days.

Explain if Scooty would be held liable for his principals losses. (5 marks)

(Total: 10 marks)

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