Where a sub-agent is PROPERLY appointed (Section 192):
AThe principal is bound to third parties; the sub-agent is responsible to the agent (and to the principal only for fraud or wilful wrong)
BThe principal is not bound by the sub-agent's acts
CThe agent bears no responsibility
DThe sub-agent is liable to the principal for everything
Answer & Solution
Correct answer: A. The principal is bound to third parties; the sub-agent is responsible to the agent (and to the principal only for fraud or wilful wrong)
On proper appointment, the principal is liable to third parties for the sub-agent's acts; the sub-agent answers to the agent, and to the principal only for fraud or wilful wrong.
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