Sub-agent

A sub-agent is a person appointed by an agent to perform certain acts on behalf of the principal, where the agent has the express or implied authority to make such an appointment. The sub-agent acts under the supervision and control of the original agent, who remains primarily responsible to the principal. The relationship between the sub-agent and the principal is indirect, mediated through the original agent.

The creation of a sub-agency relationship depends on the agent's authority. The agent must have the authority (express or implied) from the principal to delegate the specific task or responsibilities to the sub-agent. If the agent lacks the authority to appoint a sub-agent, the sub-agent's actions may not bind the principal.

A key distinction exists between a sub-agent and an agent's agent. An agent's agent is appointed to assist the agent but works directly for the agent, and does not establish a direct legal relationship with the principal. In contrast, a sub-agent, when properly appointed, creates a fiduciary duty not just to the agent but also to the principal, even though the principal did not directly appoint them.

The principal is generally bound by the acts of a properly authorized sub-agent, as if those acts were performed by the original agent. However, the original agent remains liable to the principal for the conduct of the sub-agent, unless otherwise agreed upon. The sub-agent is also liable to the principal for their own negligence or misconduct.

The authority and responsibilities delegated to the sub-agent must be clearly defined. The scope of the sub-agent's authority is derived from the scope of the original agent's authority, as limited by the specific delegation.

The use of sub-agents is common in various industries, including insurance, real estate, and shipping, where agents may need assistance in managing a large volume of work or specialized tasks.