a) Discuss the liability of the principal against the third party in agency. 

 

Liability of the principal against the third party in agency

In agency, a principal is liable to a third party in various circumstances. First, the principal is liable to a third party if the agent performed certain and specific actions under the authority of the principal. If the principal authorizes or directs an agent to act in a certain manner, then he is bound by the actions of the agent to a third party. Also, the principal is liable to a third party in the case of agency of necessity (DeMott, 2018). In the case of agency of necessity, the agent may not act under the direct authority of the principal. However, the agent might make decisions that seem necessary under agency and according to the situation at hand. This way, the principal is held liable for the actions of the argent. However, the principal is not liable to a third party where the agent acts in ultra vires. If the agent acts beyond his or her powers, he or she is then considered liable for the actions committed to a third party.