Tort Negligence Liability For Principals And Agents In Harris
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FAQ
Where a third party suffers any loss or injury caused by the tort (that is, any wrongful act or omission that violates the rights of another) of the agent while acting on behalf of the principal, the agent is personally liable to the third party.
Principal's liability for acts of agent A principal is normally liable for all acts of an agent within the agent's authority, whether responsibility arises in contract or in tort. Authority means the agent's actual, apparent (ostensible) or usual (customary) authority.
A principal is always liable for torts committed while the agent completes their official responsibilities. For torts occurring outside of official duties, the liability of the principal depends on whether the agent's tort occurred during a frolic or a detour.
A person is always liable for her own torts, so an agent who commits a tort is liable; if the tort was in the scope of employment the principal is liable too. Unless the principal put the agent up to committing the tort, the agent will have to reimburse the principal.
Similarly, if the agent or principal loses capacity to enter into an agency relationship, it is suspended or terminated. The agency terminates if its purpose becomes illegal. Even though authority has terminated, whether by action of the parties or operation of law, the principal may still be subject to liability.
An unidentified or partially disclosed principal is one that the other party to a transaction knows only that the agent may be acting on behalf of but not the identity of that principal; both the agent and the undisclosed principal are liable for such transactions.
An agent is liable to a principal when he/she acts without actual authority, but with apparent authority. An agent is liable to indemnify a principal for loss or damage resulting from his/her act. A principal owes certain contractual duties to his/her agent.
The agent is personally liable upon a contract she enters into with a third person on behalf of an undisclosed principal (see Figure 29-3). The agent is liable because the third person has relied upon the agent individually and has accepted the agent's personal undertaking to perform the contract.
An agent is not generally liable for contracts made; the principal is liable. But the agent will be liable if he is undisclosed or partially disclosed, if the agent lacks authority or exceeds it, or, of course, if the agent entered into the contract in a personal capacity.
