Which of the following is correct with regard to a contract entered into with a third person by an agent of an undisclosed principal?
A) The undisclosed principal has no liability on the contract, even if her existence and identity are discovered by the third person.
B) The agent is personally liable upon the contract.
C) If the third party obtains a judgment against the principal and the judgment is satisfied, the agent may still have liability to that third party.
D) The agent has no liability to the third person if the agent has acted within the scope of her authority.

Question

Quizplus · Accepted Answer

The agent is personally liable upon the contract when acting on behalf of an undisclosed principal, because the third party, at the time of contract formation, is unaware of the principal's existence and thus relies on the agent's creditworthiness and representations.

Which of the Following Is Correct with Regard to a Contract