B. What is an undisclosed principal? b. What is a partially disclosed principal? c. What liability does an agent have to a third party when the principal is either undisclosed or partially disclosed? d. Dale is asked to be an agent for Phil, but Phil
does not wish third parties to know that Dale represents him. In light of your answer to part (c), why would Dale want to be an agent for Phil? Why would Phil wish that third parties not know his identity? Explain.
a . An undisclosed principal is not known to the third party. The third party believes it is dealing personally and solely with the agent.
b. A partially disclosed or unidentified principal exists where the third party knows an agency relationship exists, but doesn't know who the principal is.
c. If the principal is partially disclosed or undisclosed, the agent is liable.
d. Assuming Phil has adequate finances, it makes little difference to Dale whether his principal is disclosed or undisclosed. As long as Dale acts within his scope of authority, Phil is bound to perform on the contract. However, if Phil is financially shaky and cannot honor his commitments, Dale must be aware he has personal liability on all contracts in which Phil was an undisclosed principal, in which case the contracting party may look to Dale for payment on the contracts. Dale is entitled to indemnity from Phil, but Phil may file bankruptcy. Phil may wish to remain undisclosed in order to effect a transaction that is more beneficial to him.
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