When an agent, acting within the scope of his or her authority, contracts with a third party, a disclosed principal is liable to the third party.

Disclosed Principal

A principal whose identity is known to a third party at the time the agent makes a contract with the third party.

Liable

Legally responsible or obligated, often in reference to the duty to compensate for harm or loss caused by one's actions or omissions.

Scope of Authority

The scope of authority delineates the range of actions or decisions that an individual or entity, such as an employee or agent, is officially empowered to make on behalf of another party or organization.