Agency and Partnership Bar Practice Exam 2025 – All-in-One Guide to Mastering Your Bar Exam Success!

A principal can be held liable for the acts of an agent when the agent is acting within the scope of their authority. This means that the agent is performing actions that are authorized by the principal or are reasonably related to the authorized actions. The rationale behind this principle is that the actions taken by the agent are effectively viewed as being taken by the principal, as the agent is carrying out their duties on behalf of the principal.

When an agent acts within the scope of their authority, the principal has given the agent the power to conduct business or make decisions in certain matters. As a result, if the agent's actions directly relate to these authorized activities, the principal can be held accountable for the consequences of those actions, including any damages or obligations that arise.

This principle underpins various aspects of agency law, highlighting the importance of the agent's role in representing the principal's interests and the extent of the authority granted to the agent. In this context, liability is not placed on the principal for actions that fall outside the granted authority, as those actions may not reflect the principal's intentions or interests. The concept of vicarious liability reinforces that relationship, making it clear that the principal assumes responsibility for their agent's actions within the defined boundaries of authority.