Also known as: agents agent · agent's agent · agents' agent · subagent · sub-agent
Written by attorneys · grounded in primary & secondary sources — see below
A person appointed by an agent to perform functions the agent undertook for the principal when the agent lacks authority to create a subagency. The appointee owes duties solely to the appointing agent and cannot bind the original principal or subject that principal to liability.
Pinnacle Properties hired broker Lena to locate and purchase commercial sites but the contract contained no clause authorizing Lena to retain others or making her responsible for their conduct. Lena nevertheless retained analyst Theo to inspect properties and report findings directly to her. When Theo's inaccurate report caused Pinnacle to overpay a seller, Pinnacle sued Lena alone because Theo lacked any authority to bind Pinnacle.
Atlantic Gulf & Oriental engaged Admiral Oriental Line as its Philippine ship agent under an operating contract that did not empower further delegation. Admiral Oriental Line then hired a local firm to fit out a vessel. The local firm reported only to Admiral Oriental Line. When cargo owners later sued over the vessel's loss, the court treated the local firm as Admiral Oriental Line's agent's agent, leaving Admiral Oriental Line solely responsible for its conduct.
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An agent's agent arises when the original agent lacks authority to appoint a subagent or fails to agree to remain primarily responsible for the appointee's conduct. The appointee therefore owes duties only to the appointing agent and cannot bind the original principal. A subagent, by contrast, is appointed by an authorized agent who agrees to bear primary responsibility, allowing the subagent's acts to bind the principal.
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No. Because the original principal never authorized the appointment, the agent's agent's actions cannot create apparent authority running to the original principal. Third parties dealing with the agent's agent must look solely to the appointing agent for relief.
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The appointing agent is solely responsible to the original principal and to third parties. The original principal incurs no direct liability because no subagency relationship was created.
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