Under the Second Restatement,which of the following is correct with regard to a contract entered into with a third person by an agent of an undisclosed principal?
A) The agent has no liability to the third person if the agent has acted within the scope of her authority.
B) The agent is personally liable upon the contract unless the third person discovers the existence and identity of the principal and elects to hold the principal to the contract.
C) Once the third person learns of the existence and identity of the principal,that third person may hold both the principal and the agent to the performance of the contract.
D) If the third party obtains a judgment against the principal,the agent may still have liability to that third party.

Question

Quizplus · Accepted Answer

Under the Second Restatement, an agent of an undisclosed principal is personally liable upon the contract unless the third person discovers the existence and identity of the principal and elects to hold the principal to the contract. Therefore, the correct choice is B. Choice A is incorrect because the agent does have liability if the principal is undisclosed. Choice C is partly correct but incomplete as it does not mention that the agent is also liable. Choice D may or may not be true depending on the circumstances of the case.

Under the Second Restatement,which of the Following Is Correct with Regard