Agency Law Essay Research Coursework Paper Term Paper

Agency
Name Course Instructor Date
"Explain, in your own words, how an agent may, in certain circumstances, become liable to a third party for not having kept in touch with the principal. Create a unique fact situation in which you illustrate your answer."
An agent may become liable to a third party for not keeping in touch with the principal. For example, unnamed principal contracts Mr. X charter a boat, and Mr. X identifies himself as an agent and charters the boat from Mr. Y and does not inform him about the undisclosed principal and Mr. Y is made to believe that Mr. X will be the one using the boat upon the agreed time. Mr. X keeps the boat for long without communicating with Mr. Y and the boat is damaged while in his possession. Assuming that Mr. X knowingly hid the identity of the unnamed principal he is liable if there are damages to the boat when it is in possession of the agent.
The Canadian legal system like common law establishes that, if a direct agent has acted on behalf of the principal within the authority that the latter granted him, the confidentiality of the contract only exists between the principal and the third party, and the agent is not liable to the third party nor acquires rights against him. This is based on the principal and agent identity doctrine. There is the vicarious liability for an employee’s or tort conduct if this is committed in the normal course of employment and within the scope of employment. 
An agent is liable for the torts that they commit at the time of their working, unless the agent was ordered or instituted by the principal, or even failed to properly to supervise the agent including those who are not properly qualified. If the agent was not in the right frame of mind, under extreme duress or involuntarily intoxicated they can also escape liability for their torts. 
When there is an undisclosed principal and the agent describes himself as the agent, then the agent is solely held responsible for damages to the boat and not the undisclosed principal. In the scenario, Mr. X fails to mention the principal and that he is an agent working on behalf of someone else. In a scenario where Mr. X does not use the boat at any given moment and the principal becomes neglectful causing damage to the boat he would not be duty-bound to deal with the boat’s damage. However, in this case, Mr X took the boat and failed to communicate with Mr. Y for long, so it is clear that that Mr. X was acting on behalf of Y, but had not keep in touch with the principal even after there was damage to the boat.
The law of contract in Canada highlights tha...