Also known as: undisclosed agencies · undisclosed principal
Written by attorneys · grounded in primary & secondary sources — see below
An agency relationship in which the agent transacts business for a principal without disclosing to the third party that any principal is involved.
Uma Upadhyay negotiated a supply contract with Union Steel on behalf of Ultimate Solutions. She never mentioned any principal during talks or in the documents. Union Steel later discovered the connection and sought to enforce the deal directly against Ultimate Solutions. The undisclosed status means Ultimate Solutions is bound as principal while Uma remains personally liable as well.
Umar Underwood purchased shares through a broker without informing the seller that he acted for Uriah Urban. The seller believed it dealt only with Umar. After the transaction collapsed, Uriah Urban faced claims as the true party in interest. The lack of any notice of agency rendered Uriah an undisclosed principal subject to liability on the contract.
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The third party must have no notice at all that the agent acts for any principal. Notice of agency existence alone shifts the classification to partially disclosed even if the principal's identity remains unknown.
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No. An undisclosed principal remains liable on a simple contract even when the writing names only the agent. Liability is barred only for sealed instruments or negotiable instruments under specific Restatement provisions.
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The agent stays personally liable on the contract because the third party reasonably believes it deals with the agent alone. Both the agent and the undisclosed principal are bound until the third party elects its remedy.
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