Frequently Asked Questions
What are the consequences of dealing with an undisclosed principal?
The consequences of dealing with an undisclosed principal can be significant. If the third party is unaware of the existence of a principal, they may believe they are contracting directly with the agent. This can lead to confusion and potential disputes if the undisclosed principal later seeks to enforce the contract or if issues arise during the performance of the contract.
Can an undisclosed principal be held liable for the actions of their agent?
Yes, an undisclosed principal can be held liable for the actions of their agent. Even though the third party may have initially believed they were contracting with the agent alone, once the undisclosed principal's identity is revealed, they can be held responsible for fulfilling the obligations and liabilities arising from the contract. It is important for undisclosed principals to understand that they cannot escape liability by remaining undisclosed.
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