What happens if an agent performs acts outside their authority?

When an agent performs acts outside their authority, the agent is held accountable directly for those actions. This means that if the agent engages in activities that exceed the scope of their designated powers, they can be personally liable for any resulting obligations or damages.

This holds significance in agency law, as the principal (the party who delegates authority to the agent) is typically not bound by actions taken outside of the agent’s granted authority, unless the principal later ratifies those actions. Therefore, by acting outside their authority, the agent assumes personal responsibility for the consequences, which ensures that they exercise their power judiciously and within the limits set by the principal.

Understanding this concept is critical for agents, as it emphasizes the importance of clearly defined roles and the necessity of adhering to specified limits of authority in professional dealings.