If a third party believes an agent is acting with actual or apparent authority, he or she may sue the principal for "agency liability" or "vicarious liability."
Agency liability refers to the legal responsibility of a principal for the actions or omissions of their agent. It arises when the agent is acting within the scope of their authority, whether actual or apparent, and the principal can be held accountable for the agent's conduct.
Actual authority refers to the express or implied authority granted by the principal to the agent to act on their behalf. Apparent authority, on the other hand, refers to the authority that a reasonable third party would believe the agent possesses based on the principal's conduct and representations. Even if the agent does not have actual authority, the principal can still be held liable if they create an appearance of authority
By suing the principal for agency liability, the third party seeks to hold the principal accountable for the actions of their agent, even if they were not directly involved in the transaction or interaction with the third party. This legal principle helps protect the rights of third parties who reasonably rely on the authority and representation of agents in their dealings with the principal.
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