A disclosed principal is an individual or entity whose identity is made known to a third party through an agent. In this arrangement, the agent acts on behalf of the disclosed principal in a contract. Importantly, the disclosed principal is generally liable for obligations arising from the contract, while the agent is typically not held liable, provided they acted within their authority.
The term "disclosed principal" is commonly used in contract law, particularly in agency relationships. It is relevant in various legal contexts, including commercial transactions and real estate dealings. Understanding the concept is essential for anyone involved in contracts where an agent represents another party. Users can manage related forms and procedures effectively with tools like US Legal Forms, which provide templates drafted by legal professionals.
Here are a couple of examples of abatement:
Example 1: A real estate agent (the agent) represents a homeowner (the disclosed principal) in selling their property. The buyer knows they are dealing with the homeowner and not the agent, making the homeowner liable for any contractual obligations.
Example 2: A travel agent (the agent) books a vacation package for a client (the disclosed principal) with a travel company. The travel company knows the identity of the client, making the client responsible for payment under the contract. (hypothetical example)
Examples of state differences (not exhaustive):
| State | Key Differences |
|---|---|
| California | Specific laws regarding agency relationships may impose additional disclosure requirements. |
| New York | Agency law may allow for more flexibility in determining agent liability. |
| Texas | State laws emphasize the need for clear communication of authority to avoid liability issues. |
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
| Term | Definition | Key Differences |
|---|---|---|
| Undisclosed Principal | A principal whose identity is not revealed to the third party. | The agent may be held liable for the contract obligations. |
| Agent | A person authorized to act on behalf of another (the principal). | The agent's liability depends on whether they disclose the principal's identity. |
| Independent Contractor | A person hired to perform a service without direct supervision. | Independent contractors may have different liability rules compared to agents. |
If you are involved in a contract where a disclosed principal is represented, ensure that the agent has the proper authority. Review the contract carefully to understand your obligations. If you need assistance, consider using US Legal Forms for templates that can help you navigate the process. For complex situations, consulting a legal professional is advisable.
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If an agent exceeds their authority, they may become liable for the obligations of the contract.