Agency Agreement Undisclosed Principal

Even if a lessee may enter into a lease on the assumption that the party with whom it holds a contract is the actual lessor, the validity of the lease is not affected by the fact that the latter party was not the true owner of the leased property, provided that the necessary P&A are in place. A legal headache related to bulk agency orders placed by an asset manager with a broker on behalf of several clients. As a rule, the agent will place the order first, without naming the principals, just to tell the broker which principals he should assign the securities later in the day. Editor`s note: “The Agency principle is a type of special contract concluded by two or more persons, one person (agent) acting on behalf of the other (principal). Such an agent may have one or more sub-agents. The undisclosed client is a concept that falls under the law of the Agency. undisclosed contracting entity means any person acting through the spacer for the purpose of negotiating with the third party, without his or her identity being disclosed. The third party is not aware of the existence of such a client and considers the agent to be acting for himself. In other words, the third party considers the agent to be a sponsor. As a general rule, the contractor shall give such assurances on the instructions of the procuring entity or at times when it clearly wishes to enter into a commitment.

In such cases, the agent is personally liable, except in exceptional cases. However, the Common Law does not fully exempt this undisclosed principal and, in the event of delay, imposes certain obligations and obligations on him and also guarantees him certain rights. This is an exception to the general rule of contractual connectivity. If the procuring entity wishes to acquire performance of the contract, it may do so subject to the rights and obligations between the holder and the third party. If the third party is innocent and unaware that the agent has acted for a principal, if the procuring entity wishes the performance of such a contract, the rights and liabilities of the third party shall be protected. Article 232 contains the following provisions on this subject: it does not apply – or, in any case, should not – if an officer has not mentioned the agency report. An agent who didn`t reveal he was an agent (no matter for whom) – call this guy an “undisclosed agent” – is better known as “Prinzipal,” according to this commentator. Or a liar. But the law has a friendlier view, about which you can learn much more here.

This is correctly described as an agency obligation, but an unconditional obligation: the agent must fulfill the contract unconditionally on behalf of his unnamed contracting entity, and then enter into his own agreements with the payer regarding the reimbursement of funds paid (or received) on his behalf. The agent`s other recourse is to disclose the principal and bring the agent together to deal with the agent directly with him – but even then, the counterparty may choose to compel the agent to execute the transaction. An undisclosed principal usually refers to a main character whose existence is unknown to the third party with whom the agent is acting and, therefore, the agent is the principal in the eyes of the third party. The common law doctrine on undisclosed procuring entities confers rights and liabilities on the undisclosed procuring entity, notwithstanding that it is not a party to the contract in question. . . .

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Marmee Reizen

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