Multiple choice

A sub-agent is responsible to the principal on which of the following grounds?

  1. Fraud or Negligence

  2. Negligence or Deceit

  3. Wilful wrong or Fraud

  4. Wilful wrong or Negligence
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C Correct answer
Explanation

Under Section 192 of the Indian Contract Act, a sub-agent is responsible to the principal for acts of fraud or wilful wrong committed by him in respect of the goods, but not for acts of mere negligence. The sub-agent owes a duty of care to the principal, and will be liable only for intentional misconduct (wilful wrong) or fraudulent acts, not for ordinary negligence. Ordinary negligence is attributable to the agent, not the sub-agent.

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