Undisclosed Principal in Agency Relationship: Ventilating and Streamlinig the Anomalous Doctrine for Commercial Benefits
Undisclosed Principal in Agency Relationship: Ventilating and Streamlinig the Anomalous Doctrine for Commercial Benefits

Summary/Abstract: The doctrine of undisclosed principal is a problematic area in the law of agency. Almost all jurists refer to it as an anomaly because it is at variance with the long-established contractual logic. How can a person be bound to another of whom he knows nothing about and who he did not intend to contract? How can the law not distinguish between acting in one's own name and acting in another's name. While the commercial imperative for allowing the doctrine is well recognized, the theoretical rationale for the doctrine has rarely been agreed. The failure to apply one theoretical approach clearly and consistently in explaining the doctrine has caused confusion.Worse still, the simultaneous application of many approaches has resulted in common law rules that at times favor the interests of the third party and other times those of the principal. This paper interrogates the undisclosed principal through doctrinal research method. After showing why the standard contract and other theories failed despite their soundness, the paper streamlines the law and recommend among other things that only in specific situations should the principle of undisclosed principal be permitted. By so doing, the spirit of the muddle’s doctrine looks pacified.

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