Under agency law, when can an employer be liable for an agent's actions?

• A. Only when the agent acts outside of authority.
• B. When the agent acts within actual or apparent authority.
• C. Employers are never liable for agents.
• D. Only when the agent acts with malicious intent.

Answer: (B)

The key idea is that a boss is liable for what their agent does when the agent has authority to act for the boss. If the agent has actual authority—either express instructions or implied power from the agent’s role or past practice—the employer is bound by the agent’s actions. If the agent lacks real authority but a third party reasonably believes the agent has authority because of the employer’s representations or conduct, that’s apparent authority, and the employer is still bound. So when the agent acts within either actual or apparent authority, the employer can be held responsible for those acts. The other scenarios aren’t required for liability: malicious intent isn’t necessary, and acting outside authority isn’t normally binding unless the employer ratifies the act or other exceptions apply.