Liability of Principal and Agent; Termination of Agency

Read this chapter on the agent's fiduciary and general duty to the principal and the principal's duty to the agent (contract and tort). This section explores what the demise of a relationship between a third party, principal, and agent means in the legal sphere. Pay attention to the chart (Figure 39.1) on types of authority and the discussion on implied authority.

Introduction

After reading this chapter, you should understand the following:

  1.     The principal's liability in the contract
  2.     The principal's liability in tort
  3.     The principal's criminal liability
  4.     The agent's personal liability in tort and contract
  5.     How agency relationships are terminated
In the preceding chapter, we considered the relationships between agent and principal. Now we turn to relationships between third parties and the principal or agent. When the agent makes a contract for his principal or commits a tort during his work, is the principal liable? What is the agent's responsibility for torts committed and contracts entered into on behalf of his principal? How may the relationship be terminated so that the principal or agent will no longer have a responsibility toward or liability for the acts of the other? These are the questions addressed in this chapter.

 

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