Principal's Liability to Third Parties and Agent Liability

Question 1

Principal’s Liability

Answer 1

Tort law, have to refer to vicarious liability to determine whether agent’s actions will bind principal.

Principal liable for the tortious acts of an agent even if the principal is free of any wrong doing.

Respondeat superior. Key: control and scope.
Agent act under principal’s control and agent commit the tort while acting within scope of employment.
Act falls within scope of employment if it’s assigned by the employer or it it is work done while agent is subject to employer’s control.

Traveling to/from work doesn’t fall within scope. Travel behalf of employer does fall within scope.

Personal errand relatively minor, detour and falls within scope.

Significant deviation, frolic and doesn’t fall within scope.

Principal subject to vicarious liability even if agent only has apparent authority.

Principal subject to direct liability when:
Agent acts with actual authority.
Principal negligent in selecting, supervising, controlling agent.
Principal tries to delegate non-delegable duty.

Question 2

Agent’s Liability

Answer 2

3d party has notice of principal’s existence and identity, then principal is disclosed principal; agent generally not a party to the contract and doesn’t have liability on the contract.

3d party has notice of the principal’s existence but not identity then principal is partially disclosed principal; agent becomes party to the contract.

3d party who discovers the existence of an undisclosed principal must choose whether to hold the agent or the principal liable under the election of remedies doctrine.

Agents always liable for their own tortious conduct.