Additional Questions

Here is a little background for the questions that follow:

Restatement (Second) of Agency § 186. General Rule

An undisclosed principal is bound by contracts and conveyances made on his account by an agent acting within his authority, except that the principal is not bound by a contract which is under seal or which is negotiable, or upon a contract which excludes him.

Restatement (Second) of Agency § 321: Principal Partially Disclosed

Unless otherwise agreed, a person purporting to make a contract with another for a partially disclosed principal is a party to the contract.

Question: Can you tell me how Restatement (Second) of Agency § 186 and Restatement (Second) of Agency § 321 do not contradict one another, or if they do contradict one another in some situations, how do I decide which rule applies?

Answer: Section 186 simply says that the principal is bound if he has an agent acting on his authority; § 321 says a partially disclosed principal means both the agent and the principal are bound if the agent acted within his authority, unless otherwise agreed by the third party. An agent is also bound by his actions under §186, but that is clear because the third party was not told of any principal. If the agent had alluded to a principal, it would move to the partially disclosed section.

Question: It seems that the court in Atlantic Salmon could have applied § 186 and held that even though Curran did not disclose his principal, because he was an agent acting within his authority, the corporate entity principal should have been liable. Did it have something to do with the contract stating a fictitious corporation's name instead of the real corporation's name? - Thus being a contract that excludes the real principal.

Answer: Holding the corporation liable was not the issue -- there was no money in the corporation to recover. There was no question the corporation was liable, but the plaintiffs wanted to hold Curran personally liable.

Question: In undisclosed principal situations, does the wronged third party have the right to elect whether they want to hold either the agent or the undisclosed principal liable?

Answer: Generally, yes. If the agent was acting within his authority in making the contract, both the agent and the principal are liable.