In the context of sub-agents and borrowed agents, which statement is accurate?

• A. The principal has no control over either
• B. The principal must enter into an agreement with a sub-agent
• C. There is no agreement for sub-agent
• D. The principal has full control over a borrowed agent

Answer: (C)

Sub-agents are people the agent hires to help carry out the principal’s instructions. There is no direct contract between the principal and a sub-agent; the sub-agent’s duties and relationship come through the agent. The agent remains responsible to the principal for the sub-agent’s actions and ensures they stay within the scope of authority. Borrowed agents involve a different dynamic: a borrowing principal has control over the agent during the borrowing period and is liable for the agent’s conduct within the scope of that employment, but that doesn’t create a direct agreement with a sub-agent. The statement that there is no direct agreement with a sub-agent best captures how sub-agents are normally set up.