Which of the following could demonstrate unnecessary liability for a principal?

Prepare for the Law of Agency Test. Delve into multiple choice questions featuring hints and explanations. Sharpen your understanding of agency law and gear up for success!

The selection of an agent committing an act of negligence outside the scope of employment is the correct answer because it illustrates a situation where a principal could incur unnecessary liability. When an agent acts outside the boundaries of their employment or designated authority, the principal may not be protected under the principles of vicarious liability. Vicarious liability generally holds a principal responsible for acts conducted by an agent while performing their job duties. However, if the agent's actions occur beyond the designated scope of their role and involve negligence, the principal could face legal ramifications, making this scenario particularly concerning in terms of liability.

In contrast, an agent acting impulsively but still within their authority (the first option) would mean the principal is still protected from liability as the agent was acting in accordance with their employment bounds. Completing tasks as directed by the principal (the third option) would not create unnecessary liability, as the agent is following orders and acting within their scope. Lastly, an agent acting in good faith but making a mistake (the fourth option) does not typically expose the principal to liability if the agent's intentions align with their responsibilities and the actions were not negligent or outside the scope of their employment.

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