Asked by Ja'Nayla Watts on Jul 14, 2024

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Why is it impossible for there to be apparent authority on behalf of an undisclosed principal?

Apparent Authority

The appearance or assumption of authority based on the actions or statements of a principal, leading others to believe a person has the right to act on the principal’s behalf.

Undisclosed Principal

A legal term referring to a situation where an agent acts on behalf of a principal, but the identity of the principal is not revealed to the third party involved in the transaction.

  • Assess the ideas related to apparent authority and how they apply to non-disclosed principals.
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DR
Damian RodriguezJul 21, 2024
Final Answer :
Apparent authority arises when the principal's manifestations cause a third party to form a reasonable belief that the agent is authorized to act in a certain way.A principal is undisclosed when the third party lacks knowledge or reason to know both the principal's existence and the principal's identity.A third party who deals with an agent for an undisclosed principal obviously cannot assess the principal's reliability,integrity,and creditworthiness.Indeed,here the third party reasonably believes that the agent is the other party to the contract.Thus,the third party may hold an agent liable on contracts made for an undisclosed principal.