Liability on contracts made by agents 169The agent’s liability for breach of warranty of authority
An agent can be liable to a third party for breach of warranty of authority. This is quite dif-
ferent from being liable on the contract made on the principal’s behalf. Liability for breach
of warranty of authority arises if:
(i) an agent makes a representation to a third party, warranting that he has authority to act
for a principal;
(ii) the agent does not in fact have such authority; and
(iii) the third party acts on this representation to his detriment.
Figure 6.3The doctrine of the undisclosed principal