Quiz 38: Third Persons in Agency

Business

Refer to the case Rothschild Sunsystems, Inc. v Pawlus Case Issue The facts to this case are: • Defendant ordered items from plaintiff. • Defendant placed the order with his name and name of a company (the principal). • The order was never paid for. • Plaintiff sued defendant. Defendant argued he was an agent and not liable. The issue is whether the defendant is personally liable for payment when he did not fully disclose that he was an agent for the principal. Relevant Terms, Laws, and Cases Agent - is someone who is hired by a principal to act for the principal. • The agent is seen to be controlled by the principal. • Liability caused by the agent will make the principal liable. • However, there are exceptions to liability… Undisclosed Principal - when agent does not disclose he is working for a principal, the agent will be held personally liable for his/her actions. Opinion The court held for plaintiff. They argued that: • In order for the agent to avoid liability he must reveal that he is working for a principal. • The defendant in this case did not do so properly. • Defendant wrote his company name but did not mention he was placing an order for the company. Thus, the defendant is personally liable as he failed to disclose the principal.

Relevant Terms, Laws, and Cases Agent - is someone who is hired by a principal to act for the principal. • The agent is seen to be controlled by the principal. • Liability caused by the agent will make the principal liable. • However, there are exceptions to liability… Undisclosed Principal - when agent does not disclose he is working for a principal, the agent will be held personally liable for his/her actions. Discussion In this case, the facts are: • M made a contract with an agent working for an undisclosed principal. • The contract was breached. • M found out identity of the principal. If M had not found out the principal's identity, then she can only sue the agent. But, on discovering the principal's identity, M can sue both principal or the agent or both.

Case summary: Mr. LS is an architect and was hired by AF to work on a land development project. In September, LS contacted Central M professional services to provide engineering and surveying over the project assigned to him by AF. In October, Central sent him a proposal of this work and LS agreed to them orally stating that they should go for this work. Later on when the first phase of this work was completed, Central sent a bill to LS amounting $5864.00. Over this LS requested them to send all the bills directly to AF. When the payment of bill was not paid, Central sued both LS and AF. The court gave a summary judgment favoring Central and asks LS to pay a fine of $ $5864.00. Over this LS appealed and disclosed that he has not revealed the identity of the principal (AF) to Central at the time of agreeing to its proposal. But LS has also maintained that he has disclosed to Central that he is an architect and not the developer and thus there is no binding contract between central and him. Conclusion: As it is said that Central has not taken any written and signed document from LS at the time it started working on the first phase of the proposal thus it is not entitled to get any legal right to sue AF and LS for the non-payment of the bills. Secondly, when LS has disclosed to Central that he is an architect and not the developer and thus there is no binding contract, over this Central should have asked LS about the principal in this contract and the name of the land developer. But Central failed to do so and thus the court should gave punishment and held LS liable for this scandal but legally Central cannot sue LS for fraud in absence of any written proves with it stating about the agreement and binding contract between both of them.

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