Agency arises where one person acts on another’s behalf and subject to their control, with the other’s consent. It is the legal mechanism through which every organisation acts.
Authority. Actual authority — express or implied — is what the principal conferred. Apparent authority arises from the principal’s manifestations to the third party. Ratification adopts an unauthorised act.
Liability in contract. A disclosed principal is bound and the agent is not, provided the agent signed in a representative capacity. Where the principal is undisclosed or partially disclosed, the agent may be personally liable.
Liability in tort. A principal is liable for an employee’s torts committed within the scope of employment. The scope inquiry turns on whether the conduct was of the kind the employee was employed to perform, occurred substantially within authorised time and space limits, and was motivated at least in part to serve the principal.
Independent contractors. Generally no vicarious liability, subject to exceptions for non-delegable duties, inherently dangerous activities, and negligent selection.
Agent’s duties. Loyalty, obedience within the scope of authority, care, and accounting. An employee owes a duty of loyalty during employment that prohibits competing, though preparing to compete is generally permitted.
Termination. Actual authority ends on termination; apparent authority persists until third parties are notified.