Law-The Agency Concept

The agency concept is where one person (the principal/employer) appoints another (the agent/employee) to act in his/her place when dealing with third parties. In companies, employees would be considered agents. Agents are appointed to perform all duties the principal would do or specific duties. A principal-agent relationship may be created by a contract or by appearance that this relationship exists. If a person acts as an agent for someone and that other …

…be liable. This theory is known as vicarious liability. However, if the agent commits an intentional tort on a third party, the principal is not liable in most cases. On the other hand, if the intentional tort is committed because the agent thought it would further the business of the principal (or himself), the principal could be liable. If an agent commits a tort while carrying out non-business related activities, the principal is not liable.