LEGAL PRINCIPLE: LAW OF AGENCY — Agent — Personal Liability — Agent Acting for Principal
PRINCIPLE STATEMENT
A person is liable for his engagements even though he is acting for another, unless he can show that by the law of agency he expressly or impliedly negatived his personal liability.
RATIO DECIDENDI (SOURCE)
Per Uwaifo, JSC, quoting Lord Scarman in Stanley Yeung Kai Yung v. Hong Kong and Shanghai Banking Corpn. (1981) A.C. 787 (P.C.) at p. 795, in Asafa Foods Factory Ltd. v. Alraine Nig. Ltd. & Anor (2002) NLC-511998(SC) at p. 10; Paras B–C.
"It is not the law that, if a principal is liable, his agent cannot be. The true principle of the law is that a person is liable for his engagements (as for his torts) even though he is acting for another, unless he can show that by the law of agency he is to be held to have expressly or impliedly negatived his personal liability."
EXPLANATION / SCOPE
An agent may be personally liable on contracts made for a principal. The agent must show that personal liability was negatived expressly or impliedly. The principle applies to both contract and tort. The agent cannot hide behind the principal. The rule protects third parties who deal with agents. The agent’s signature on a contract without qualification may indicate personal liability. The burden is on the agent to prove exclusion of personal liability. The principle applies to disclosed, partially disclosed, and undisclosed principals. The agent’s liability is not automatically excluded by the existence of a principal. The rule promotes accountability in agency relationships.
