It has already been observed that an agent is appointed to bring the principal into contractual relations with third parties and the acts of the agent are the acts of the principal.
As a rule, therefore, an agent cannot personally enforce contracts entered into by him on behalf of the principal, nor can he be personally held liable for them, unless there is a contract to the contrary (Sec. 230). The principal is the right person to enforce such contracts and to be held liable there for.
There are, however, certain exceptions to this rule, where an agent is presumed to be personally liable, unless a contract to the contrary exists.
ADVERTISEMENTS:
At the very outset it is worth noting that in certain cases where the agent is personally liable, a person dealing with him may hold either him or his principal or both of them liable (Sec. 233). In other words, the liability of the principal and the agent is ‘joint and several’ in some cases.
Even where the agent is personally liable, the principal is also liable to third parties and hence the saying: “The law which superadds the liability of an agent does not detract from the liability of the principal.”
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The third party dealing with an agent who is personally liable can choose between (a) suing both principal and agent, jointly, (b) electing to sue one of them. It is important that a judgment obtained against one only and remaining unsatisfied is no bar to a second suit against the other party, i. e., if the third party sues the agent and obtains no satisfaction, he may afterwards sue the principal because the liability is ‘joint and several’ (T.R, Chettiar vs M.K. Chettiar).