Agency: undisclosed principal

Updated: Aug 20, 2021

Where an agent contracts without disclosing that he is an agent, many problems arise. Generally the principal or the agent may sue or be sued. However, if the third party had reason to believe that he was dealing with the agent as principal and that this was a relevant fact. only the agent may sue on the contract: if A will not contract with B, B cannot evade this by contracting through C, an undisclosed agent. Where the third party may sue principal or agent, he must make a decision and cannot sue both.

Reference: The Penguin Business Dictionary, 3rd edt.

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James Knight
Editor of Education
James is the Editor of Education for Invezz, where he covers topics from across the financial world, from the stock market, to cryptocurrency, to macroeconomic markets.... read more.