The New Palgrave Dictionary of Economics

2018 Edition
| Editors: Macmillan Publishers Ltd

Principal and Agent (i)

  • J. E. C. Munro
Reference work entry


An agent is a person who is employed to do an act on behalf of another called the principal, so that as a rule the principal himself becomes bound. That one person can represent another is a doctrine that has developed but slowly. In Roman law it was a general principle that no one could enter into a contract by stipulation on behalf of another, and in the case of mandate the mandatarius or quasi-agent incurred a personal liability towards their parties. The modern principle is that contracts entered into by an agent are regarded as entered into by the principal, provided the contract is within the scope of the agent’s authority.


Asymmetric information Principal and agent (i) Contract law Munro, J. E. 

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© Macmillan Publishers Ltd. 2018

Authors and Affiliations

  • J. E. C. Munro
    • 1
  1. 1.