Hillary tells Iris that she wants to buy Iris's house "on behalf of a party who wishes her identity not to be known." The party is Baker Associates.With Baker's consent,Hillary contracts with Iris on Baker's behalf to buy the house.What is Hillary's liability on this contract?

Question

Quizplus · Accepted Answer

A principal is unidentified if the third party (1)knows or has reason to know that the agent is acting for a principal but (2)lacks knowledge or reason to know the principal's identity.When a principal is unidentified,the third party usually depends on the agent's reliability to some degree.For this reason,and to give the third party additional protection,an agent is liable on contracts made for an unidentified principal unless the agent and the third party agree otherwise.

Hillary Tells Iris That She Wants to Buy Iris's House