'undamental principle that has informed the law of agency and corporations for centuries namely, the acts of agents, and the knowledge they acquire while acting within the scope of their authority are presumptively imputed to their principals (see Henry v Allen, 151 NY 1, 9.

The General RuleĪs a threshold matter, New York's courts have cited with approval the HOWEVER, New York's courts have construed this exception very narrowly. But, in order to appreciate the exception, a brief discussion of the general rule is in order. In legal speak, this concept is referred to as in pari delicto, or, the 'adverse interest' doctrine. The employer, or principal, should not be held liable for wrongful actions (such as fraud) that the employee committed solely for his own benefit, and outside the scope of his employment (or agency). Although we've written about the concept of an employer being held legally, or vicariously, responsible for the acts (or omissions) of its employees that were committed in the scope of the performance of their job, which is referred to in my circles as 'respondeat superior' (see, e.g., ' Why A School Was Deemed Responsible For A Science Experiment That Went Awry'), there is a very important exception to this rule in the corporate realm that should be relatively self-evident, and is grounded in notions of fundamental fairness:

Namely nyc office