Liabilities of the Parties

Question 1

third party v. principal

Answer 1

the principle will be liable to the third party on a K entered into by her agent if the agent had valid authority to act.

Question 2

What does the agent’s liability depend on?

Answer 2

Whether or not the principal was disclosed.

Question 3

If the principal is disclosed…

Answer 3

(existence and identity known to 3rd party) the agent is generally not liable.

Exceptions;

• liable if the K intended the agent to be liable
• maybe liable under his implied warranty that a principal with contractual capacity exists, and that he, the agent, had authority to K for the principal

Question 4

If the principal is unidentified or undisclosed..

Answer 4

(one who existence is known but whose identity is withheld, or neither identity nor existence is disclosed) liability to both principal and the agent.

Question 5

When the principal is disclosed, who can enforce the K and hold the third party liable?

Answer 5

Only the principal.

Question 6

When the principal is unidentified or undisclosed, who can enforce the K and hold the third party liable?

Answer 6

the agent or the principal.

Question 7

When can a principal NOT enforce a K against a third party?

Answer 7

when there has been affirmative fraudulent representation of P’s identify or if there is an unforeseen increased burden to third party due to the fact that performance is due to the principal and not the agent.