Undisclosed Principal

In agency law, a principal who is not known to the third party with whom their agent interacts. The undisclosed principal may still be liable for the acts of their agent under certain circumstances.
The buyer unknowingly entered into a contract with an undisclosed principal, who is now liable for the terms of the agreement.

While not as common, undisclosed principal cases can arise in commercial transactions. For example, Si memorized v. Rother (1843) addressed the rights of undisclosed principals.

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Frequently Asked Questions

What are the potential benefits of having an undisclosed principal?

The principal may avoid personal liability or negotiate a more favorable deal by keeping their identity hidden from the third party.

What are the risks associated with undisclosed principal relationships?

The undisclosed principal may be liable for the agent's acts, even unauthorized ones, if they later ratify the transaction.

What are the disclosure requirements for undisclosed principals?

In some situations, there may be a duty to disclose the principal's identity to avoid misleading the third party.

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