Difference Between Sub and Substituted

Agent
The difference between the sub-agent and the substituted agent can be
broadly classified into control & direction, responsibility, privity of contract,
appointment, liability, remuneration to agents, and responsibility towards the
third party:

1. Control & direction- All the direction and control given to the sub-
agent is by the original agent as he is the agent of the original
agent. In contrast, all the control exercise on the substituted agent
is directly through the principal. The principal can’t directly exercise
control over the sub-agent, but he can exercise it through the
original agent.
2. Responsibility- A sub-agent is responsible for all the acts to the
original agent, whereas the substituted agent is directly responsible
to the principal for all his acts. Only for fraud and wilful wrong, the
substituted agent is directly responsible to the principal. The sub
agent is indirectly responsible to the principal through the original
agent for all the other acts.
3. Privity of Contract- There is no privity of contract between the
sub-agent and the principal. The privity of sub-agent is with the
original agent. On the other, there is privity between the principal
and the substituted agent. The substituted agent can be directly
sued and can also sue the principal. The principal cannot directly
sue or be sued by the sub-agent except in the cases of fraud and
wilful wrong.
4. Appointment- A sub-agent can only be appointed by the original
agent when the nature of the business dealt by the agency demands
it or where there is a customary practice in the trade business to
appoint the sub-agent. A substituted agent is appointed when the
original agent has the express or the implied authority from the
principal to appoint such a person. A substituted agent is usually
appointed for the completion of a particular part of the business
when it requires some special skills or which can’t be done by the
agent himself.
5. Liability- The sub-agent is liable to the original agent for any acts
done by him. The sub-agent is liable for any conduct, breach of
duty, fraud, or wilful wrong directly to the original agent. The sub-
agent is liable to both the principal and the original agent for the
fraud or wilful wrong. On the other hand, the substituted agent is
liable only to the principal for any act or breach committed by him.
The principal can hold the original agent liable for any acts done by
 the substituted agent only if the original agent has negligently
chosen such person.
6. Remuneration to agents- The original agent pays the commission
or remuneration to the sub-agent through his pocket or share. The
principal makes the payment to the substituted agent.
7. Responsibility towards the third party- The contract entered by
the properly appointed sub-agent on behalf of the principal will have
the same effect as the contract entered by his agent or by the
principal himself. The principal will be bound to the third parties for
such a contract. But when the sub-agent is not properly appointed,
the sub agent’s contract will have no liability on the principal vis-à-
vis third party. For such a contract, the original agent will be liable
to both the principal and the third party. Any act done by the
substituted agent within his authority will bound the principal vis-à-
vis a third party.