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In the context of the law of agency, an agent will NOT be liable for a contract in which of the following instances?
A. Where the agent intends to take the benefit of the contract and does not disclose they are acting as an agent
B. Where the agent fails to disclose that they are acting as such
C. Where the agent acts on their own behalf although claiming to be an agent
could you please explain why B is the answer.
Option A clearly makes the agent liable
Option C – although the principal will be liable to the innocent third party, the principal will then be able to claim against the agent
Option B – the principle of the undisclosed principal!
It seems to be generally accepted that the principle of the undisclosed principal is an anomaly!
An interesting case arose in the United States where Disney corporation acquired more than 25,000 acres (around 10,000 hectares) of land through agents without disclosing the fact that the agents were acting as such
Where an agent, with authority, acts on behalf of a principal without disclosing the fact that they are acting as an agent, it’s the principal that is liable
It’s a tricky point, isn’t it!
OK?
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