Written by attorneys · grounded in primary & secondary sources — see below
A principal in whose behalf an agent acts when the third party has no notice that the agent is acting for any principal at all. The third party therefore treats the agent as the sole contracting party.
Sources & Authorities
How it applies
Common Examples
2
Insurance Broker Hides Startup
Uma Underwood, an insurance broker, contacted Harbor Underwriters to obtain coverage for a new venture. She told the underwriter only that she was placing coverage and listed herself as the named insured on the application. Harbor issued the binder without learning of any other party. When the actual venture, Ultra Precision, later suffered a loss and claimed under the binder, the undisclosed-principal rule made Ultra Precision a party to the contract even though Harbor had no notice of its existence.
Manager Books Singer Without Disclosure
Ugo Uberti, a talent manager, negotiated a concert date with Bright Events. He referred only to my project and signed the purchase order in his own name. Bright Events accepted believing it was dealing solely with Ugo. The undisclosed-principal rule therefore left the actual performer, King, bound on the contract once the facts established that Bright Events had no notice of any principal at the time of acceptance.
Put it into practice
Test Yourself
10
Practice Questions5
· 1 primary source
Select any source to read its text and confirm it supports the definition.
Uniform Acts
Restatements
Casebooks
Study Supplements
Affiliated Ute Citizens of Utah v. United States406 U.S. 128, 153-154 (1972)
Common questions
Frequently Asked
4
How does an undisclosed principal differ from a partially disclosed principal?+
An undisclosed principal exists when the third party has no notice that the agent is acting for anyone other than herself. A partially disclosed principal exists when the third party knows an agent is involved but does not know the principal's identity. The distinction affects only whether the agent remains personally liable alongside the principal.
Supporting sources
Is an undisclosed principal liable on the agent's contract?+
Yes. An undisclosed principal is liable on authorized contracts made by the agent just as a partially disclosed principal is. The classification affects only whether the agent remains personally liable alongside the principal.
Supporting sources
What facts establish that a principal is undisclosed rather than partially disclosed?+
The third party must have no notice at the time of the transaction that the agent is acting for any principal. Oral statements that the agent is placing coverage for a startup or client usually supply notice of a principal's existence and prevent undisclosed status even if the principal's name is never given.
Supporting sources
Does signing only the agent's name on documents make the principal undisclosed?+
No. The classification turns on what notice the third party received at the time of the transaction, not on whose name appears on later paperwork. If the third party was told the agent was acting for a principal, the principal is at least partially disclosed regardless of signature blocks.
Supporting sources
Business Associations Agency and PartnershipPower of agent to bind principal · AuthorityUBEFoundational