What term describes when one party is held legally responsible for the actions of another?

The term that describes when one party is held legally responsible for the actions of another is vicarious liability. This legal principle typically arises in employment situations, where an employer can be held accountable for the actions of an employee performed within the scope of their employment. The idea is that the employer has a degree of control over their employees and thus bears some responsibility for their conduct while they are working.

This concept is essential in business law, as it underscores the importance of ensuring proper training, supervision, and protocols to minimize risks associated with employees’ actions. It allows injured parties to seek compensation from the employer rather than just the individual employee, who may not have sufficient resources to cover damages.

In contrast, agency refers to a relationship where one party acts on behalf of another, rather than the legal responsibility aspect highlighted in the question. Subcontracting involves hiring another party to perform part of a main contract, which doesn't directly address accountability for actions. Legal liability is a broader term that encompasses various forms of legal responsibility without the specific nuance related to an employer-employee relationship.