| Monograph : Agency Law |
Contents |
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| (8)
Position of agent with regard to third parties |
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a. |
When an agent makes a contract on behalf
of a disclosed principal and within his actual authority,
he is not liable to the third party on the contract nor
can he sue the third party on it as the agent is not a
party to the contract. |
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b. |
If it is expressly provided in the contract
with the third party that the agent shall be personally
liable to the third party independent of his principal,
the third party may sue the agent under the terms of the
contract. |
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c. |
As a general rule, an agent is not personally
liable in a contract to a third party for failing to carry
out a contractual duty owed by his principal to the third
party but which has been delegated by his principal to
him to perform on the principal's behalf. The third
party should proceed against the principal for any loss
suffered as a result of the principal's failure to perform
the duty. |
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d. |
The agent can be sued by the third party
under a contract where the existence of the principal
is undisclosed at the time the contract is made by the
agent in the agent's own name but in fact on the
principal's behalf. |
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e. |
Where an agent, by words or conduct, represents
to a third party that he has authority to act on behalf
of a principal, and the third party is induced by such
representation to enter into a contract with the agent,
the agent is deemed to have warranted that the representation
is true, and is liable for any loss caused to such third
party by a breach of that warranty of authority, even
if the agent is under a mistaken belief that he had such
authority. |
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f. |
Where a third party suffers any loss or
injury caused by the tort (that is, any wrongful act or
omission that violates the rights of another) of the agent
while acting on behalf of the principal, the agent is
personally liable to the third party. The general rule
is that the agent cannot escape liability by claiming
that he acted under the authority or instructions of the
principal. |
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