Appointment of a sub-agent and the principal's liability towards third parties

When a sub-agent may be appointed (s. 190). An agent cannot lawfully employ another to perform acts he has expressly or impliedly undertaken to perform personally (delegatus non potest delegare: agency rests on the principal's confidence in the agent). A sub-agent may, however, be employed where the ordinary custom of trade allows it, or where the nature of the agency requires it; the appointment is also valid where the terms of the agency originally contemplated it, or where an unforeseen emergency in the course of the agency makes delegation necessary. “A sub-agent is a person employed by, and acting under the control of, the original agent in the business of the agency” (s. 191).

Effect on the principal's liability:

• Sub-agent properly appointed (s. 192): the principal is liable to third parties for the sub-agent's acts; the agent is responsible to the principal for them; and the sub-agent is responsible to the agent, not to the principal, except for fraud or wilful wrong.
• Sub-agent appointed without authority (s. 193): the agent alone answers for the sub-agent's acts, to the principal and to third persons alike; the principal is not responsible for them, and the sub-agent answers only to the agent. Where a carrier handed the goods to another carrier and they were damaged in transit, the first carrier was held liable.

Conclusion. A properly appointed sub-agent binds the principal to third parties as the agent himself would; an unauthorised one does not, and the agent then bears the consequences himself.