How does agency law address misrepresentation and fraud?

Agency law holds agents accountable for their conduct in relation to their clients and third parties, which includes addressing issues of misrepresentation and fraud. When an agent makes a false statement or fails to disclose important information that leads to a misunderstanding or misrepresentation, the law stipulates that the agent can be held liable for any damages resulting from that misconduct. This principle ensures that agents act with honesty and integrity, fostering trust in the agency relationship.

By establishing this liability, agency law encourages agents to adhere to ethical standards and provides a recourse for clients harmed by an agent's fraudulent actions. This framework is essential for maintaining accountability and protecting the interests of clients within the agency context.