Table of Contents

Vicarious liability

Table of Contents

Theoretical overview

vicarious liability is a situation in which one party is held partially responsible for the unlawful actions of a third party. The third party also bears its share of liabilityVicarious liability is a liability where the master is liable for the tort of his servant, principal for his agent, partner for another partner and an employer for an employee. 

Vicarious liability can arise in situations where one party is supposed to be responsible for a third party.

The legal maxim Qui Facit per alium Facit per se also applies to the concept of vicarious liability, which means he who acts for another, acts for himself.

These are the major relations in which vicarious liability of a person arises: –

  1. Master and Servant;
  2. Partners in a Partnership Firm;
  3. Principal and Agent;
  4. Company and its Directors; and
  5. Owner and Independent Contractor.

Master-Servant Relationship

In relation to the master-servant, the master employs the services of the servant and he acts on the orders of the master and thus a special relationship exists between the two and in case of atrocities committed by the servant, his master is also liable. Master will be held liable for the tort or wrongful act committed by his servant during the course of employment.

Essential of master servant relationship:

  • Such act is committed during the course of employment 
  • Tort is committed by the servant.

Partners in a Partnership Firm

partnership firm is a type of business in which a group of people, also called partners, come together. They set up their own firm and provide services and products through it. However, a partnership firm is not treated as a separate legal entity. All the partners are liable to the same extent as  the guilty partner. The relationships that partner share with each other are the same as those of the principle and the agent. 

Principal and Agent

An agent is a person who acts on behalf of the principal. When a person appoints another to act on his behalf, it creates a relationship between the principal and agent. Because the principal put the agent in a position where a wrong was committed, the principal is vicarious liable for the agent’s actions. Therefore, if an agent does any wrongful act in the course of his employment, then the master will be held liable for the acts committed by the agent

Suppose the agent performs some activity in the absence of the principal, which favours the principal, even though the principal does not know this act. In that case, he will still be held responsible as the agent acted for the principal’s benefit. 

Owner and Independent Contractor

An independent contractor is a person who does work for another person (employer). He is not under any control of the employer (Principal or Master). He is his own master. An independent contractor performs his duties at his discretion.

Difference between an Independent Contractor and Servant

A servant is a person whom another person employs to work under the discretion and control of his master. Whereas, an independent contractor is a person who is employed by another person to perform work under his own discretion. He is his own master. He controls all his actions. An owner can examine the work of a servant and the method used to complete that work but he cannot examine an independent contractor.

legal maxim 

Qui Facit per alium Facit per se : which means he who acts for another, acts for himself.

Important case laws

  • Hemline v. Pusten and company:

One of two partners bribs the plaintiff club. court held that both the partners will be liable for wrongful act.

  • State bank of India v. Shyama Devi:

the plaintiff husband gave some amount and cheque to his friend who was an employee in the defendant bank for being deposit in the plaintiffs account. No proper receipt for the deposit was obtain the bank employee misappropriate  amount.

It was held by the supreme court that the employee when he committed the fraud was not acting in the scope of banks employment but in private capacity as depositors friend therefore the defendant bank could not be held liable for same.

  • Trilok Singh v Kailash Bharti:

While the owner of the motor cycle was outside the country his younger brother took motor cycle without his knowledge or permission and caused the accident. It was held that the younger brother could not be deemed to be the agent of the owner of the motor cycle and later could not be vicariously liable.

Points to remember

  • vicarious liability is a situation in which one party is held partially responsible for the unlawful actions of a third party. The third party also bears its share of liability
  • Vicarious liability can arise in situations where one party is supposed to be responsible for a third party.
  • These are the major relations in which vicarious liability of a person arises: –Master and Servant, Partners in a Partnership Firm, Principal and Agent, Company and its Directors; and Owner and Independent Contractor.

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