> #legal-relationship , #undisclosed-principal > Discus legal relationship between the principal ,agent and third party in the circumstance of undisclosed principal?
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HAMIS ALPHANI
May 17, 2023

Discus legal relationship between the principal ,agent and third party in the circumstance of undisclosed principal?

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Anonymous
May 17, 2023

In the circumstance of an undisclosed principal, the legal relationship between the principal, agent, and third party can be complex. An undisclosed principal refers to a situation where an agent enters into a contract with a third party on behalf of a principal, but the third party is unaware of the existence of the principal. The agent is seen as the sole contracting party in such cases, and the principal remains undisclosed.


Here are the key aspects of the legal relationship between the principal, agent, and third party in the context of an undisclosed principal:

  1. Agent's authority: The agent, acting on behalf of the undisclosed principal, has the authority to bind the principal to the contract. However, the agent is personally liable to the third party because the third party is unaware of the principal's existence.
  2. Liability of the agent: Since the agent is considered the contracting party, the agent is generally responsible for performing the obligations and fulfilling the contract terms with the third party. If the agent fails to perform, the third party can hold the agent personally liable for any breach or damages.
  3. Liability of the principal: Although the undisclosed principal is not known to the third party at the time of contract formation, the principal can be held liable to the third party if the principal's existence is subsequently disclosed. Once the principal is disclosed, the third party may choose to hold the principal accountable for the obligations under the contract. However, until the principal is disclosed, the third party cannot directly enforce its rights against the principal.
  4. Agent's duty of disclosure: In general, an agent has a duty to disclose the principal's existence to the third party if the agent is acting on behalf of a known principal. However, in the case of an undisclosed principal, the agent may intentionally keep the principal's identity concealed. If the agent breaches this duty and discloses the principal's identity without authorization, the agent may be liable to the undisclosed principal for any resulting damages.
  5. Third party's rights upon disclosure: When the undisclosed principal's identity is revealed, the third party may choose to enforce its rights against the principal. The third-party can hold the principal responsible for the obligations under the contract, seek remedies, or pursue legal action against the principal for any breach of contract by the agent.


It is important to note that laws regarding undisclosed principals may vary in different jurisdictions, and specific circumstances can influence the legal relationship between the principal, agent, and third party. It is advisable to consult legal professionals or refer to applicable laws in the relevant jurisdiction for accurate and detailed information.

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