Limited liability partnership PDF

Running Head: AGENCY AND LIABILITY IN THE B.C. PARTNERSHIP ACT
AGENCY AND LIABILITY IN THE B.C. PARTNERSHIP ACT
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1AGENCY AND LIABILITY IN THE B.C. PARTNERSHIP ACT
Introduction
It can be stated that a relationship of agency is established between two people when one
of the two acts as a principal and the other as the agent. The agent derives the authority to
perform his function from the principal1. Such authority to be derived may be express or implied.
In cases where the agent is involved in any wrongful act, it has been held that the principal is not
required to expressly order his agent to commit such wrongful act. However the principal is held
liable in some circumstances for the wrongful acts of his agent.
Discussion
Vicarious liability in the context of a principal agent relationship is referred to as the
liability imposed on the principal for the wrongful act committed by the agent of such principal2.
It is to be mentioned that according to section 7 of the British Columbia Partnership Act that a
firm or a company’s partner will be considered to be the agent of such firm or company when
conducting business in the name of the firm or company. Further in accordance with section 7 it
can be stated that any act of a partner of a firm which is done for the purpose of carrying on the
business of the firm will be binding on all the partners.
However there are two exceptions to the aforementioned rule as contained in section 7(2)
which states “(a) the partner so acting has in fact no authority to act for the firm in the particular
matter (b) the person with whom he or she is dealing either knows that the partner has no
authority, or does not know or believe him or her to be a partner”. According to section 8 of the
1 West, Henry. "Vicarious Liability." American Legal Encyclopedia (2017).
2 Cole, Jeffrey. "Agency-Vicarious Liability-Abrogation of the Both Ways Rule." DePaul Law Review 16.2 (2015):
478.