Final answer:
The producer, acting as an agent, is generally liable when they perform an act prohibited in the agency contract. The extent of liability depends on the specific agency contract terms and may include financial restitution or other legal consequences.
Step-by-step explanation:
When the producer performs an act which is prohibited in the agency contract, the liability typically falls on the producer themselves. Agency law is centered around the relationships and responsibilities between a principal and an agent. When the producer, acting as an agent, violates the terms of an agency contract, they may become liable for any resulting damages or losses. However, depending on the nature of the act and the terms specified in the agency agreement, the principal may also bear some responsibility, especially if they implicitly condoned the act or failed to properly supervise the agent.
Each agency contract may have specific clauses addressing prohibited actions and the consequences thereof, which would determine the extent of the liability. Liability could include financial restitution, termination of the agency relationship, or even legal action, depending on the severity of the prohibited action. It is important for both producers and principals to clearly understand and adhere to the terms of their contract to avoid such complications.