Which principal disclosure statuses are recognized in agency termination discussions?

Which principal disclosure statuses are recognized in agency termination discussions?

• A. Disclosed Principal, Partially Disclosed Principal, and Undisclosed Principal
• B. Disclosed P
• C. Partially Disclosed P
• D. Undisclosed P

Answer: (A)

In termination discussions, you distinguish how much the third party knows about the principal. There are three recognized statuses: a disclosed principal, where the third party knows the agent is acting for a principal and knows who the principal is; a partially disclosed principal, where the third party knows there is a principal but not the principal’s identity; and an undisclosed principal, where the third party does not know there is a principal at all. These distinctions matter because they determine who is liable to the third party and who can be bound by the agent’s acts when the agency ends. With a disclosed principal, the principal typically bears liability for contracts entered within authority, and the agent is not personally liable. With a partially disclosed principal, both the agent and principal can be liable to the third party, depending on the circumstances. With an undisclosed principal, the agent may be liable on the contract, and the principal may also become liable if the contract was within the agent’s authority and the principal is later identified. That’s why all three statuses are recognized in agency termination contexts.

In termination discussions, you distinguish how much the third party knows about the principal. There are three recognized statuses: a disclosed principal, where the third party knows the agent is acting for a principal and knows who the principal is; a partially disclosed principal, where the third party knows there is a principal but not the principal’s identity; and an undisclosed principal, where the third party does not know there is a principal at all. These distinctions matter because they determine who is liable to the third party and who can be bound by the agent’s acts when the agency ends. With a disclosed principal, the principal typically bears liability for contracts entered within authority, and the agent is not personally liable. With a partially disclosed principal, both the agent and principal can be liable to the third party, depending on the circumstances. With an undisclosed principal, the agent may be liable on the contract, and the principal may also become liable if the contract was within the agent’s authority and the principal is later identified. That’s why all three statuses are recognized in agency termination contexts.