Undisclosed Principal

8/15/2024 pdw

Paul Weitzel,

Samuel Gasway,

Tyrell Howsden,

William L. Duffy

Unless the parties agree otherwise, an agent is liable for a contract entered into on behalf of an undisclosed principal. Restatement (Third) of Agency § 2.06. A principal is undisclosed when the third-party is unaware that the agent is acting on behalf of a principal and the third-party is unaware of the principal’s identity. In this circumstance, the agent is liable as a party to the contract. This makes sense—the third party believes she was contracting with the person now claiming to be the agent.

Here's a chart that may help keep these straight.

	Counterparty knows the agent is an agent	Counterparty does not know the agent is an agent
Counterparty knows principal's identity	Disclosed principal (agent usually isn't bound)	Not possible
Counterparty does not know principal's identity	Unidentified principal (agent is usually bound)	Undisclosed principal (agent is bound)

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