Which of the following is true regarding an agent who is acting for an undisclosed principal?
A) The agent with actual authority will bind both himself and the principal on most contracts.
B) The third party will never be bound in a contract with the principal.
C) An undisclosed principal will bind only himself and not the agent.
D) Failure to disclose the name of the principal is a form of fraud.

Question

Quizplus · Accepted Answer

In the case of an undisclosed principal, the agent with actual authority will bind both himself and the principal on most contracts. The third party will be able to hold both the agent and principal liable for any breach of contract. Failure to disclose the name of the principal in this situation is not considered fraud as long as the agent has actual authority.

Which of the Following Is True Regarding an Agent Who