Which of the following correctly describes when a sub-agent relationship is created and authorized?
- Sub-agents may always be appointed by any agent without the principal's consent.
- Sub-agents may never be appointed; the agent must personally perform all duties.
- A sub-agent is a person appointed by an agent to perform tasks within the scope of the agency, and the appointment is authorized when the principal expressly authorizes sub-agents, when it is customary in the industry, or when the nature of the work necessitates delegation. (correct answer)
- A sub-agent has no duty of loyalty to the principal and acts solely on behalf of the appointing agent.
Explanation: A sub-agent is a person appointed by an authorized agent to assist with the agency's work. Sub-agent appointments require authorization, which may be: express (the principal authorizes the agent to appoint sub-agents), implied (customary in the industry to delegate certain tasks), or necessary (the nature of the work makes delegation necessary). When properly authorized, a sub-agent owes fiduciary duties to both the appointing agent and the original principal. Answer A is incorrect because authorization is required. Answer B is incorrect because delegation is permitted under appropriate circumstances. Answer D is incorrect because sub-agents owe duties to the principal as well.