Future Business Leaders of America (FBLA) Business Law Practice Exam

In agency law, who is responsible for the actions of the agent?

1. The principal

2. The attorney

3. The government

4. The executor

The correct answer is: The principal

In agency law, the principal is responsible for the actions of the agent when the agent is acting within the scope of their authority. This principle is rooted in the concept that the agent acts on behalf of the principal, and any actions taken by the agent in the course of their duties can be attributed to the principal. This relationship establishes a legal binding where the principal may be held liable for the contractual obligations incurred by the agent while performing authorized tasks. The authority of the agent can be either express, as given directly by the principal, or implied, based on the actions and practices that typically accompany such roles. When the agent operates within the defined scope, their actions, including any misconduct or negligence, are considered the responsibility of the principal. In this scenario, the roles of the other entities listed do not confer the same level of responsibility regarding the actions of the agent in this context. An attorney, while acting as an agent for their client, does not bear responsibility for the client's actions unless they exceed their provided authority or act unlawfully. Similarly, a government and an executor do not directly relate to the legal implications of agency relationships the same way a principal does. Thus, the correct choice illustrates the fundamental liability principle in agency law, where the