This situation is one that arises with relative frequency.
The Agent (A) truly is an agent of the Principal (P), but just never tells anyone. It’s a secret agency. It’s not disclosed or referred to in any way.
In this case, of course, it is the FACT of the existence of the agency which is not disclosed that is in issue. Naturally, the necessary consequence of the identity of the principal is not disclosed.
The law here is quite clear. When the contract with the Third Party (T) is signed, the result is:
- A has a contract with T
- A may sue T
- T may sue A
P has no rights under the agreement and may not sue T. But, P does have some rights as against A, however that would be under the A and P agency contract.
This type of agreement is enforced just as if no agency contract was in existence.
Brian Madigan LL.B., Broker