Question

If an agent contracts in the capacity of an agent but principals name is not given then, principal does not continue to be liable for all acts of the agent and agent will be held personally liable.

• A. True
• B. False
• C. Partly true
• D. None of the above

Answer 1

The correct option is B False

In the agency relationship, the agent’s actions in dealing with third parties will affect the legal rights of the principal. What the third party knows about the agency agreement is irrelevant to the agent’s legal authority to act. That authority runs from principal to agent. As long as an agent has authorization, either express or implied, she may bind the principal legally. Thus the seller of a house may be ignorant of the buyer’s true identity; the person he supposes to be the prospective purchaser might be the agent of an undisclosed principal. Nevertheless, if the agent is authorized to make the purchase, the seller’s ignorance is not a ground for either seller or principal to void the deal.