First Principles of Business Law

7. An agent's relations with third parties

7.1. Situations in which legal relations may arise

Normally, when an agent deals with a third party, they do so on behalf of their principal, and the legal relations that ensue exist purely between the principal and the third party. But, in some circumstances, the agent may also acquire legal rights or liabilities in relation to the third party.

One example of this would be when the agent tells the third party that they are acting both for themselves and for a principal. In such cases, the agent is also a principal in their own right.

In this section of the eStudy module, the examples illustrate the less obvious situations in which an agent may acquire a contractual liability to third parties.