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lwpat
lwpat, Attorney
Category: Business Law
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Experience:  Attorney with over 35 years of business experience.
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You Run A Successful Paper Mill And Send Out Your Three Best

Resolved Question:

You run a successful paper mill and send out your three best personnel to secure new wood pulp sources using due diligence and skill. Applying the agency principles outlined in this chapter, answer the following questions. Delilah, does not return with wood pulp, but brings back three contracts. Acting within the scope of her authority, she contracted with Evon, who knew your identity at the time; Felipe, who knew that Delilah was acting on behalf of someone but not whom; and Giorgio, who did not know that Delilah was acting on anyone’s behalf. For which contracts, if any, are you liable? For which contracts, if any, is Delilah liable? Explain. For which contracts, if any, are you liable?

200 words

Submitted: 4 years ago.
Category: Business Law
Expert:  lwpat replied 4 years ago.

If a third person has no knowledge about the fact that the agent is acting for a principal, then both the agency and the principal is known as undisclosed ones. The agent of an undisclosed principal can be held liable on the contract as the real obligor as she contracted in that capacity. Similarly, an undisclosed principal can also be held liable as he must also assume its burdens. The liability of an undisclosed principal and the agent is an alternative liability. It means that the third party can only make either the principal or the agent liable and not both of them together. The contract with Giorgio is an undisclosed one an you and Delilah are both liable. The situation is the same with Felipe although the agency is known. He can hold either the agent or the principal liable for the contract. However, Evon knew that Delilah was your agent and that you were the principal. Therefore you are liable but Delilah is not.

Expert:  lwpat replied 4 years ago.
The law of agency and undisclosed principal can be summarized as follows. (1) An undisclosed principal may sue and be sued on a contract made by an agent on his behalf, acting within the scope of his actual authority. (2) In entering into the contract, the agent must intend to act on the principal’s behalf. (3) The agent of an undisclosed principal may also sue and be sued on the contract. (4) Any defense which the third party may have against the agent is available against his principal.
lwpat, Attorney
Category: Business Law
Satisfied Customers: 25386
Experience: Attorney with over 35 years of business experience.
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