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Why is it impossible for there to be apparent authority on behalf of an undisclosed principal?
On Jul 21, 2024
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.