What is the liability of a principal in cases of an agent's negligence?

A principal may be held liable for an agent's negligence if that negligence occurs within the scope of employment, which reflects the fundamental concept of vicarious liability in agency law. This means that when an agent is acting in furtherance of their duties for the principal, any negligent acts that occur during that time can implicate the principal in legal responsibility.

This doctrine is based on the rationale that the principal benefits from the agent's conduct and should therefore bear the costs of any harm resulting from the agent's negligence while performing their tasks. The scope of employment is determined by various factors, including the nature of the work, the time and place of the act, and whether it serves the principal's interests.

Other options do not align with this legal principle. For instance, stating that the principal is never liable misrepresents the legal concepts at play, while suggesting that the principal is always liable overstates the degree of liability, which is contingent on the agent's actions being within the scope of their employment. Claiming that agents are personally liable, thus exempting the principal, overlooks the collective legal responsibility established in agent-principal relationships.