Final answer:
Principals are obliged to indemnify agents for actions within their actual authority; however, there is typically no duty to reimburse for actions beyond that authority. The principles of benefit taxation and ability to pay relate to tax policy, not directly to agency law. Judgment plays a role in determining actual duties in cases of competing obligations.
Step-by-step explanation:
The statement in question is generally false. In the context of agency law, a principal is obligated to indemnify an agent for payments made or expenses incurred while acting on the principal's behalf. However, this obligation typically extends only to actions within the agent's actual authority. If an agent acts outside of their actual authority and the principal does not ratify those actions, the principal may not have a duty to reimburse or indemnify the agent. The matter of indemnification in such scenarios would depend on the specific circumstances and the applicable law or agreement between the parties.
It's important to differentiate this from the benefit principle of taxation, which states those who benefit from public services should pay taxes in proportion to the benefits received, and the ability to pay principle, which argues that those who are more financially capable should bear a greater tax burden. These principles relate to tax policy rather than the agent-principal relationship.
The concept of 'Actual Duty' illustrated by the example of choosing between helping a coworker experiencing medical distress or meeting a friend as planned demonstrates the subject of judgment in fulfilling obligations, an important aspect in agency law where an agent must sometimes decide between competing duties.