A Principal’s Responsibility for the Actions of Their Agent
Agency is a contractual relationship or association between an agent and the principal. It gives the agent the authority to act under or on behalf of the principal. This relationship carries responsibilities and liabilities between them. Vicarious liability is whereby the principal is considered liable for the offences of its agent in the line of duty. In this case, the question or legal issue is whether the actions of Steve were malicious and if so, whether Big Mart was liable for his actions.
In an agency relationship, the agent deals with the client as a representative of the principal contractor. The principal does not participate directly in the business transaction. However the principal, on the principle of privity of contract may take legal action on a contract entered into by the agent. The principal may be found liable for the negligent acts of the agent. Steve’s actions are not necessarily negligent. They are merely precautionary. There would be no other way to confirm whether or not the umbrella was shoplifted or not without calling Karen back. He also voiced his suspicion that Karen was shoplifting. He did not say that she had. His speech was not malicious, and it was out of genuine belief.
The contractor is not liable for mistakes or the errors of judgment made in a sincere bid to meet their responsibilities. However, Steve is expected to act reasonably with care and due diligence in a manner that does not jeopardize the business. It is true to say that Steve acted carelessly. He had the option of inspecting the umbrella in a more silent manner that would not be offensive to Karen. In the case where Steve’s actions are found to be negligent, Big Mart would be liable for his actions. This is because the actions of Steve are within the authority given to him by his principal.
References
Rogers, S. (2012). Essentials of Business Law. San Diego: Bridgepoint Education, Inc.
