To avoid this, the principal may opt for remaining partially disclosed. This may happen if the reputation of the principal is not good. In case the identity of the principal is revealed, no one would enter into a contract. The identity of the principal would make third parties avoid entering into a contract This way, the identity of X Ltd stays hidden, and needless charges are avoided.
Therefore, to eschew this, X Ltd hires an agent and remains a partially disclosed principal. If it goes on to disclose its identity, the third parties will charge ten times more than the usual asking price.
For example, X Ltd is a multimedia giant and requires a large piece of land to develop an amusement park. If the principal is a big multinational corporation, every person will charge extremely high rates, knowing that the company has a need and can pay if it needs to. So far as he is concerned, the agent is really a principal dealing on his own behalf and in his own name. The identity of the principal would affect the price of the goods a person of whose existence a third party is unaware so that the third party does not know that the person with whom he is dealing is an agent. There are certain situations when the principals prefer to stay hidden from the third parties. Generally, when the principal is completely disclosed, the agent is not at all liable for the contract only the principal is liable. Therefore, for this reason, the agent remains liable unless otherwise agreed. There might be certain cases where the 3rd party might not have entered into the contract if they had known the identity of the principal. The rationale for making the agent liable in this case is that the third party does not know the principal's identity and relies heavily upon the trustworthiness and credit of the agent. Also, as an agent of a partially disclosed principal, Y shall be liable as well, unless the terms of the contract between the parties state otherwise. Therefore, in case Y strikes a deal between the two parties, they both would be bound by the contract. Y is the agent acting on behalf of the partially disclosed principal, and Z is the third party. The agent is also liable unless otherwise agreed between the said parties.įor example, X is the partially disclosed principal.
0 kommentar(er)
