The correct answer is: D. the agent is responsible to both the principal and third person.
An agent is a person who is authorized to act on behalf of another person, called the principal. A sub-agent is a person who is appointed by an agent to act on behalf of the principal. If an agent appoints a sub-agent without having the authority to do so, the agent is still responsible for the acts of the sub-agent. This is because the agent has created an appearance of authority, and the principal is entitled to rely on that appearance.
The agent is responsible to the principal because the agent has breached the contract of agency. The agent has promised to act in the best interests of the principal, and by appointing a sub-agent without authority, the agent has failed to do so. The agent is also responsible to the third party because the agent has created an appearance of authority. The third party is entitled to rely on that appearance, and the agent is therefore liable for the acts of the sub-agent.
The following are the possible answers and their explanations:
- A. the agent is responsible to the sub-agent only. This is incorrect because the agent is also responsible to the principal.
- B. the agent is responsible to the principal only. This is incorrect because the agent is also responsible to the third party.
- C. the agent is responsible to third person only. This is incorrect because the agent is also responsible to the principal.
- D. the agent is responsible to both the principal and third person. This is the correct answer because the agent has breached the contract of agency with the principal and has created an appearance of authority to the third party.