cpa0123
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| Posted: 13 Jan 2010 at 13:09 | IP Logged
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Disclosed principal:
P & A are in mutual agreement and third parties are aware of the relationship between P & A. Following rules apply -
1. P is always liable whether authority is actual, apparent or ratified (as long as A is authorized to perform)
2. A is not liable if the acts are within the scope of agreement with A
Partially disclosed or Undisclosed principal:
Third parties are aware that a person is an agent but do not know who the principal is OR third parties are not aware that the person is an agent. Following rules apply -
1. P is liable only for 'actual authority'
2. A is liable. However, third parties can sue either P or A (Note that they can not sue both!)
3. There is no apparent authority since P is undisclosed, so there is no chance of a third party believing that there is one
This is all that you need to know.... Refer to the flowchart if you have Becker material (R7-Pg 10). It surely helps.
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Topic: question on agent’s liabilities
Topic Closed)
