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Agency: Determining Liability
Updated 1/4/2024 PG
So far we understand what an agency relationship is and how it is formed. We also understand what duties each party (i.e., the agent and the principal) owes the other. But why do we care? One person can act on another person’s behalf– what is the big deal? Liability is the big deal! Typically we think of liability as the consequence imposed on an actor for his harmful actions. But what happens when an agent is acting on behalf of someone else? Who is liable? Should the principal be liable for the agent’s acts? Should the agent be released from liability because he or she was acting on behalf of the principal? Let us consider the answers to these questions in two contexts: contract liability and tort liability.
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