Undisclosed Principal And Agency Agreement

When the rights of an undisclosed principal are called into question, the courts recognize that he was in a better position to protect himself than the outsider. Therefore, his rights are limited by any defence or claim that the third party defendant had against the agent. But this concern for the distress of the third party is not so obvious when he is the one who tries to assert rights. Since the nature of the transaction was hidden from him from the outset, he did not have the possibility of demanding the obligation from both the contracting authority and the representative, as he might have done otherwise. But after discovering the real facts, the electoral rule is interposed to prevent him from doing the same. From a legal point of view, the teaching of the undisclosed client states that when one party concludes a contract with another party and the first party is the duly authorised representative of a contracting authority, the contracting authority may itself enforce that contract. The same applies where the first party (agent) has not necessarily indicated, when concluding the contract of the other party (customer), that it has concluded a contract as an agent of a client. Another error in the law of freedom of choice lies in the “doctrine of fusion”. If an agent and his principal can be sued against a contract (according to the interpretation of the agency contract), the doctrine of the merger, according to RMKRM against MRMVL (1926), requires that the third party decide which of the two he wishes to pursue, he cannot sue both. Article 232 contains in this respect the following provisions: If an agent concludes a contract for the client which conceals the fact that he is an intermediary, the contracting entity may benefit from the other contracting party from all the advantages of the contract, provided that the contracting authority does not cause any prejudice to the other party[vii]. However, a third person shall not be liable to an undisclosed contracting entity if the specific terms of the contract exclude liability to an undisclosed contracting entity or the contracting entity concerned[viii].

If the principal is not disclosed at the time of the transaction, but is discovered later, the third party may choose to retain this capital because it is in the interest of the actual party. Similarly, in order to avoid personal liability, the procuring entity must be disclosed at the time of conclusion of the contract. Otherwise, the representative or contracting entity shall be liable[v]. However, after the publication of the contracting entity, the contractor shall not be liable for subsequent authorised acts between the third party and the contracting entity[vi]. . . . .