Differences between a Sub-Agent and a Substituted Agent

Differences between a Sub-Agent and a Substituted Agent

The following are some of the differences between a Sub-Agent and a Substituted agent.

1. Control: A sub-agent is the agent of the original agent as he works under the control of the agent whereas, a substituted agent is the agent of the principal because he works under the control of the principal.

2. Responsibility: A sub-agent is responsible for all the acts to original agent and for the acts of fraud or willful wrong to the principal. On the other hand, a substituted agent is responsible to the principal alone.

3. Contract: There is no direct contract between the sub-agent and the principal whereas there is direct contract between the substituted agent and the principal.

4. Appointment: A an agent appoints sub-agent only when he finds it necessary as per the custom of trade or the nature of agency. Whereas, a substituted agent is appointed by the agent when he has express or implied authority to do so from the principal.

5. Liability: Sub-agent is liable to the agent. However, substituted agent is liable to the principal.

6. Remuneration to agents: The agent pays remuneration or commission to a sub-agent. But in case of substituted agent, the principal makes such payments.

7. Responsibility towards third party: A principal is not responsible to the third parties for the acts committed by the sub-agent provided he has not been appointed by the consent of the principal. The principal is bound to all the acts of a substituted agent in the same way and extent as he is liable to the acts of his agent.