Reducing the Principal’s liability due to actions of Agents:

Through contract with customers:

1. In the contract with customers the role of agents could be clearly defined
2. The principal can indemnify itself against the false/ unauthorized promises/activities of
agents

Through contracts with Agents:

1. The role of Agents should be clearly defined in the contract with Agents.
2. Punitive Actions should be mentioned in case of superceding the powers/ authorities.
3. Indemnifying itself against the unauthorized activities of Agents.

Managerial Checks:

1. Role of Agents should be only to facilitate the customers and all official work should be
completed / signed by officials of principal.
2. Performance of Agents should be monitored time to time.