Also known as: undisclosed principal · doctrine of undisclosed principal · undisclosed agency · undisclosed principal liability
Written by attorneys · grounded in primary & secondary sources — see below
A classification in agency law of a principal for whom an agent acts when the third party to the transaction has no notice that the agent is acting for any principal at all. The undisclosed principal is a party to the contract made by the agent and may be held liable on it along with the agent.
Ugo Uberti contacted Titan Haulage to arrange shipments of machinery. In his emails Ugo wrote only that he needed lanes for a client and supplied no further details about any principal. Titan completed the shipments. When the client failed to pay, Titan sued both Ugo and the client. The client is an undisclosed principal because Titan had no notice that Ugo was acting for anyone else.
Usha Upton negotiated a commercial lease with United Bank. She signed the lease only in her own name and never mentioned that she was acting for any other party. United Bank later learned that Uliana Ustinova owned the business that would occupy the space. Uliana is an undisclosed principal because United Bank had no notice at the time of contracting that Usha was acting for anyone else.
Select any source to read its text and confirm it supports the definition.
A principal is undisclosed when the third party has no notice that the agent is acting for any principal at all. Notice that the agent is acting for some unnamed principal converts the situation to partial disclosure even if the principal's identity is never revealed.
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Yes. An undisclosed principal is a party to the contract and may be held liable on it. The third party may sue either the agent or the undisclosed principal or both.
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No. The parol evidence rule does not bar evidence that a signatory acted for an undisclosed principal because the evidence adds a party rather than contradicting the written terms.
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The third party remains liable to the undisclosed principal and may have to pay again. Payment to the agent does not discharge the obligation once the principal's existence is known.
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