The modern basis for vicarious liability is termed the _____ theory as it assumes that the principal is better equipped to pay damages than an agent.

Question

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The deep pockets theory forms the basis for vicarious liability as it holds the principal (or employer) liable for the actions of their agent (or employee) on the assumption that the principal is better equipped to pay damages due to their financial position. This theory is often criticized for imposing liability on innocent parties solely based on their ability to pay.

The Modern Basis for Vicarious Liability Is Termed the _____