Understanding the Liability of Agents and Principles in Contracts

The video discusses the liability of agents in torts and contracts. Agents are always liable for their own torts, even if the principal is also liable. In contracts, if an agent discloses their relationship with the principal to a third party, the principal is bound by the contract, and the agent is not liable. However, if an agent exceeds their express authority, they may still bind the principal if they have implied authority. If the agent does not disclose the agency relationship, they may be personally liable, and the principal is not bound.

What is the liability of an agent in relation to their own torts?

• Agents are liable only if they disclose the agency relationship.

• Agents are liable only if the principal is not liable.

• Agents are always liable for their own torts.

• Agents are never liable for their own torts.

Under what condition is an agent not bound to a contract they enter on behalf of a principal?

• When the agent exceeds their express authority.

• When the agent does not disclose the agency relationship.

• When the agency relationship is disclosed or known to the third party.

• When the agent has express authority.

What can bind a principal even if an agent exceeds their express authority?

• The agent's personal liability.

• The agent's implied or inherent authority.

• The principal's explicit consent.

• The third party's knowledge of the principal.

What might happen if an agent exceeds their express authority and does not disclose the agency relationship?

• The principal is automatically bound by the contract.

• The third party cannot enforce the contract.

• The principal can sue the third party.

• The agent is liable to the third party.

When is an agent liable to a third party for exceeding their authority?

• When the agent acts beyond their express authority without disclosure.

• When the agent acts within their express authority.

• When the third party is aware of the agency relationship.

• When the principal has inherent authority.