According to Meiners, Ringleb and Edwards (2012), an agency is created when a person or the company’s agent agrees to act for, or in place of, another person or company named as principal. An agent is “the person or firm who is authorized by the principal or by operation of the law to make contracts with third persons on behalf of the principal”. In the case of Yim v. J’s Fashion, Yim never disclosed that a principal was involved with the contract established with J’s Fashion and that he was only acting as an agent. This situation would allow for J’s Fashion to have other options to sue Yim as well as the principal. The law states that a principal is liable for a simple contract made by an authorized agent. This applies only under the circumstances
