Question

Why are principals liable for the torts committed by agents when they are acting within the scope of their employment? Provide an example

Answer 1

Yes, this is true. Principal is liable for any tort committed by agents. Principal is bound by the agents' activities. Agents work under principal, they work for principal so if they commit any mistake, principal is liable for that. This liability is based on the common law "doctrine of respondeat superior" which means let the master answer!

Principal cannot escape from the liability or charge that arises due to agent's unlawful act. Principal is also liable to the third party for a contract that has been made by agent who is acting within the scope of his employment. Agent cannot be solely responsible.

Example: If Mr. John is appointed by XYZ as insurance agent and Mr. John is going to the client to provide the insurance policy, on the way, he meets an accident and loses some documents and few people get injured in that accident, so for this situation, Mr., John is not solely liable, XYZ company is liable for this incident because John met an accident while he was doing his job and was acting within the scope of his employment.