Detailed Examination of Agency and Liability in the BC Partnership Act

This report examines the concepts of agency and liability within the framework of the British Columbia Partnership Act. It establishes that a relationship of agency exists between a principal and an agent, where the agent acts on behalf of the principal. The report delves into vicarious liability, specifically focusing on how partners within a firm act as agents and the implications of their actions on the firm. It references sections 7 and 8 of the BC Partnership Act, detailing how the firm is bound by the actions of its partners when conducting business, with specific exceptions. The report explores the rationale behind holding principals liable for their agents' tortious acts, including the principal's role in selecting the agent and benefiting from the agent's actions. Ultimately, the analysis concludes that a firm, as the principal, is responsible for the actions of its partners, reflecting the application of vicarious liability principles. The report also includes a bibliography of relevant legal resources.

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.

2AGENCY AND LIABILITY IN THE B.C. PARTNERSHIP ACT
British Columbia Partnership Act any act done in the name of the firm with the intention to leally
bind the firm by any authorized person will be legally binding upon the firm and all its partners.
However as quoted in subsection 8(2) it can be said “This section does not affect any general
rule of law relating to the execution of deeds or negotiable instruments.” Thus in light of the
above provisions of the British Columbia Partnership act it can be stated that liability is imposed
on the principal for the tortuous acts of the agent primarily for the following reasons3.
 The principal has the duty to select the agent and is the only person who can assess the
strengths and weaknesses of the agent.
 The principal delegates the responsibility to the agent because of obtaining benefit from
the acts of the agent and therefore should be considered responsible for the acts of the
agent4.
 It is assumed and implied that the principal has given the agent the authority to commit
the wrongs
Conclusion
Thus after analyzing the legal provisions of the principal agent relationships in
accordance with the British Columbia Partnership Act it can be said that the all the partners of
the firms act as agents of the firm while conducting business in the name of the firm. Therefore
by the application of the principle of vicarious liability it is to be stated that the firm acts as the
principal will therefore be liable for the acts of the partners.
3 'Partnership Act' (Bclaws.ca, 2018) <http://www.bclaws.ca/civix/document/id/complete/statreg/96348_01>
accessed 25 February 2018
4 Chamallas, Martha. "Two Very Different Stories: Vicarious Liability Under Tort and Title VII Law." Ohio St.
LJ 75 (2014): 1315.

3AGENCY AND LIABILITY IN THE B.C. PARTNERSHIP ACT

4AGENCY AND LIABILITY IN THE B.C. PARTNERSHIP ACT
Bibliography
'Partnership Act' (Bclaws.ca, 2018)
<http://www.bclaws.ca/civix/document/id/complete/statreg/96348_01> accessed 25 February
2018
Chamallas, Martha. "Two Very Different Stories: Vicarious Liability Under Tort and Title VII
Law." Ohio St. LJ 75 (2014): 1315.
Cole, Jeffrey. "Agency-Vicarious Liability-Abrogation of the Both Ways Rule." DePaul Law
Review 16.2 (2015): 478.
West, Henry. "Vicarious Liability." American Legal Encyclopedia (2017).