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What Is An Undisclosed Agency Agreement

If such a contemptuous real principle appears later, it should be recognized by the alleged agency, and the other party should accept it in order to allow the agent to get away with it. It would be a kind of novation. Even if a tenant can enter into a lease on the assumption that the party with whom he holds a contract is the actual lessor, the validity of the lease is not affected by the fact that the latter party was not the true owner of the leased property, provided that the necessary assurances and answers are in place. If a third party owes money to the principal or is owed by the principal, can the payment to the agent meet the payment obligation? According to Irvine v. Watson (1880), if the agency is disclosed, an agent should only be paid by a third party if the client has given him the authority to receive that payment. Or if the agent does not transmit the payment, the “paying” party will continue to be responsible for the payment. In Armstrong v Stokes (1872), it was said that an anonymous customer was not liable to a third party after paying his agent when the latter fled with the money. This was questioned by Irvine v Watson (1880) (obiter), who said that very rarely should a third party be denied rights against a client, which seems to be the most logical approach given that an agent is controlled by his client. Another flaw in the right to freedom of choice lies in the “doctrine of fusion”.

If a representative and his client can be sued for a contract (according to the interpretation of the agency contract), the doctrine of merger according to RMKRM v MRMVL (1926) requires that the third party decide which of the two he wants to sue, he cannot sue both. If a judgment is obtained against the chosen party, but that judgment cannot be enforced (for example, if the defendant becomes insolvent or disappears), the third party cannot sue the other party. This happened in Priestly v Fernie (1863) and appears to be potentially very detrimental to third parties simply because a judgment is binding on its promulgation, as opposed to enforcement (usually when accepting money). However, the current law remains. Similarly, an agent is liable if he does not disclose the agency and the identity of the client when concluding the contract. In this case, the agent is subject to all the responsibilities created by the contract, in the same way as if the agent were the main interest. The power of an agent to act on behalf of a contracting entity must exist at the time of the conclusion of the contract. For example, if, under a lease, the seller/broker was acting in his own name and not on behalf of a principal/lender at the time of the beginning, the seller/broker cannot subsequently claim that the transaction was concluded under the aegis of a debt account. Similarly, the description of the agent as the “owner” of the goods, for example under .B a lease agreement, does not reduce the customer`s rights to his final ownership of those goods.

The purpose of such a statement in the underlying lease agreement is simply to make it clear to the customer/tenant that the contractor has better ownership of the goods between him and the contractor. An agent/broker or agent/seller has the flexibility to create and maintain the customer relationship according to the doctrine of the anonymous customer. The client can assume all rights against the client due to his financing of the business, but from the client`s point of view because of his business relationship with the agent. Under U.S. law under Reformatement (Third) of Agency ยง 2.06, an undisclosed principal may be liable to a third party who is entitled to make a change of adverse position, even if the agent was not actually authorized to act on behalf of the principal, as long as the undisclosed principal was aware of the agent`s conduct and this could cause the third party to: change its position. and the customer has not taken reasonable steps to inform the third party of the facts. .