Quiz 38: Third Persons in Agency
A) F is an agent with an undisclosed principle making a contract with C. It may be treated as F is a party to the contract. F may then sue for damages. Answer is correct. b) Specific performance is only for special items or property that can't be made elsewhere; e.g. a house, or work of art. It is unlikely that F may sue for specific performance. Answer is incorrect. c) The principal can sue once he revealed his identity to the seller. Answer is correct. d) C is not liable to the principal if the agent lied and said he was acting on his own behalf. The contract is only as good as the terms used by the agent. Answer is correct.
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.
A) The principal is liable only insofar only when the tort was committed within scope of employment. The answer is not correct as it doesn't tell whether the instruction was within the principal-agent relation. Answer incorrect. b) Torts committed within agent's authority make the principal liable. Answer correct. c) Tort suits are follows from the party injured by the agent. The contract between principal and agent can't limit liability to the third party. Answer incorrect. d) Criminal acts committed by the agent can still make the principal liable. Answer incorrect.