What results if an agent exceeds their authority while acting on behalf of a disclosed principal?

When an agent exceeds their authority while acting on behalf of a disclosed principal, the principle of agency law dictates the consequences of such actions. In this scenario, if the agent goes beyond the scope of the authority granted to them, they can be held fully responsible for their actions, despite the fact that they were ostensibly acting in the interest of the principal.

This liability arises because third parties who engage with agents do so under the pretense that the agent is acting within their granted authority. If the agent steps outside this authority, they create a situation where the third party may have relied on the agent's representations without any protection from the principal, thus exposing the agent to liability.

It is also important to note that if the agent has exceeded their authority, the principal may not be liable for any obligations that arise from the agent's unauthorized actions. Instead, the agent must bear the responsibility and potential legal repercussions for making an unauthorized commitment. This creates a need for agents to act within the clear limits established by their principal to avoid personal liability.

Understanding these dynamics is essential for comprehending the roles and responsibilities inherent in the agency relationship, particularly regarding authority and the resultant liabilities when that authority is breached.