Eric Rasmusen’s Weblog

I realized an implication of agency law yesteday: if your agent negligently injures *you*, then vicarious liability protects him from liability. Or am I wrong?

What happened was that I came home from Arlington and found that the college student who mows our lawn and does this and that with gardening had carefully uprooted and killed 19 of 20 of our morning glories, thinking they were weeds. He works very slowly and is not all that bright, and we knew that. Indeed, that is true of many of our students here. I got rid of our bottle of Roundup after a previous student gardener managed to blast brown holes in our lawn using it to kill dandelions.

At any rate, I will not charge my agent for the damage he did to the garden, and I should not be able to do so. If he had killed the neighbor’s flowers, I, his principal, would be liable. If he kills my flowers, I still, as principal, should be liable. This removes the risk from the agent, which is usually efficient. If we wanted, we could contract around this, however, a big difference from the case in which the neighbor is damaged. I could contract with my agent that he pays liquidated damages if he kills my flowers, or even simply change from the default rule of no liability to make him liable.

This entry was posted on Friday, June 24th, 2005 at 6:27 pm and is filed under Economics, Law. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.