Sub-Agent Legal Definition

A person designated by an agent to fulfil some responsibility or the whole of his agency’s operations.

SUB-AGENT

A person designated by an agent to fulfil some responsibility or the whole of his agency’s operations. Sub-agents may be seen from two perspectives.

In terms of their rights, responsibilities, or obligations to their immediate employers.

Concerning their rights and responsibilities to their superiors or true principals.

In general, a sub-agent has the same rights and incurs the same obligations in relation to his immediate employers as if he were the single and genuine principle. There are some exceptions to this general rule, for example, where sub-agents are ordinarily or necessarily employed to accomplish the ends of the agency, if the agency is avowed, and credit is exclusively given to the principal, the intermediate agent may be entirely exempted from all liability to the sub-agent.

Liability

However, until such exclusive credit has been granted, the agent will be accountable to the sub-agent, while the true principle or superior may also be liable. When an agent hires a sub-agent to execute the whole or a portion of the agency’s business without his principal’s knowledge or agreement, either explicit or implicit, the latter will only be entitled to collect from his immediate employer, and his only obligation is also to him. Because there is no privity between them, the superior or true principle is not liable to the sub-agent in this scenario.

A privity exists between the principal and the sub-agent where, by express or implied agreement of the parties, or by trade usages, a sub-agent is to be employed, and the latter may justly maintain his claim for compensation, both against the principal and his immediate employer, unless exclusive credit is given to one of them, in which case his remedy is limited to that party.