Asked by Siyali Singhaniya on May 25, 2024
Verified
Which of the following is false regarding classification of principals?
A) If the third party is aware of the principal's existence but not his or her identity, the principal is classified as a disclosed principal.
B) When the third party is aware that the agent is making an agreement on behalf of a principal and also knows who the principal is, the principal is a disclosed principal.
C) An unidentified principal is in the same classification as a partially disclosed principal.
D) If the third party does not know that an agent is acting on behalf of a principal, an undisclosed principal is involved.
E) Classification of the principal is important because it helps determine the principal's liability.
Disclosed Principal
A legal relationship in which an agent acts on behalf of a principal, with the third party being aware of the principal’s identity.
Unidentified Principal
A principal in an agency relationship whose identity remains unknown to the third party at the time of the agency transaction.
- Grasp the legal consequences of different types of principals (disclosed, partially disclosed, undisclosed).
Verified Answer
MS
Mochiko SueyoshiMay 25, 2024
Final Answer :
A
Explanation :
A disclosed principal is when the third party knows of the principal's existence and identity. If the third party is aware of the principal's existence but not their identity, the principal is classified as a partially disclosed or unidentified principal, not a disclosed principal.
Learning Objectives
- Grasp the legal consequences of different types of principals (disclosed, partially disclosed, undisclosed).