Asked by Parvesh Thakur on May 16, 2024
Verified
Which of the following is true regarding an agent who is acting for an undisclosed principal?
A) The agent will bind both himself and the principal on most contracts.
B) The third party will never be bound in a contract with the principal.
C) An undisclosed principal will bind only himself and not the agent.
D) Failure to disclose the name of the principal is a form of fraud.
Undisclosed Principal
A party in a contract whose identity is unknown to the third party with whom the agent interacts, during the transaction.
Contractual Liability
The obligation a party undertakes when entering into a contract, making them legally responsible for fulfilling the terms of the agreement.
- Gain insight into the conditions permitting an agent to act in the interest of the principal and their ensuing accountability in contractual matters.
Verified Answer
KL
Katie LernerMay 17, 2024
Final Answer :
A
Explanation :
When an agent acts for an undisclosed principal, the agent is bound by the contract along with the principal in most situations. This is because the third party, at the time of contract formation, believes they are dealing only with the agent, not knowing about the principal's existence.
Learning Objectives
- Gain insight into the conditions permitting an agent to act in the interest of the principal and their ensuing accountability in contractual matters.
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