A principal is not responsible to third parties for all agreements made by the agent on behalf of the principal even if the agent acted within the scope of his or her authority.

Question

Quizplus · Accepted Answer

A principal may be held responsible for the actions of their agent if those actions were done within the scope of their authority. This is known as the principle of vicarious liability. However, the principal is not responsible for every agreement made by the agent, especially if the agent was acting outside the scope of their authority.

A Principal Is Not Responsible to Third Parties for All