Also known as: partially disclosed principal
Written by attorneys · grounded in primary & secondary sources — see below
A principal in an agency relationship when the third party has notice that the agent acts for a principal but lacks notice of the principal's identity. The principal remains bound on authorized contracts made by the agent.
Jordan, an investment adviser, negotiated a credit line with Riverbank on behalf of a client. Jordan told the bank he was acting for a high-net-worth individual but never supplied the client's name. When the client later defaulted, the bank could enforce the obligation against the client as a partially disclosed principal because the bank knew an agency existed yet lacked the principal's identity.
Vanessa contacted Harbor Harbor to reserve vessel space for machinery parts. She stated she was arranging shipment for an export client but supplied no name. After delays caused demurrage charges, the unnamed client was held liable as a partially disclosed principal because Harbor Harbor had notice of an agency but no knowledge of the client's identity at the time of the booking.
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A disclosed principal exists when the third party knows both that the agent acts for a principal and the principal's specific identity at the time of the transaction. A partially disclosed principal exists when the third party knows only that an agent acts for some principal but does not know the identity.
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An undisclosed principal exists when the third party has no notice that the agent acts for any principal at all. A partially disclosed principal exists when the third party has notice of the agency but not the identity, placing the situation between full disclosure and complete nondisclosure.
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Yes. A partially disclosed principal is subject to liability on authorized contracts made by the agent in proper form when the parties understand the principal is a party to the transaction.
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No. The classification turns on what the third party knew at the time of the transaction, not on whether the principal's name appears in the written instrument. A partially disclosed principal remains bound even if the contract identifies only the agent.
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