A principal is liable for contracts made by his or her agents in emergencies under which legal theory?

The correct answer centers around the idea that, in emergencies, a principal can be held liable for contracts made by an agent under the legal theory of "agency by operation of law." This concept applies in situations where the necessity of an immediate action arises, and it is reasonable for the agent to act on behalf of the principal without explicit prior consent. The law recognizes that emergencies require swift decisions to prevent harm or loss, thereby allowing agents to act in the best interest of the principal.

In contrast, agency by estoppel involves situations where a principal implies authorization through their actions or representations, but it does not specifically relate to emergencies. Constructive agency typically refers to a legal relationship established by law rather than consent, often used when an agent acts on behalf of someone without their explicit agreement. Implied agency is based on the conduct of parties that suggests a mutual agreement, but it does not inherently address emergencies. Hence, in the context of contracts made in emergencies, agency by operation of law is the correct framework that establishes the principal's liability.