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First Principles of Business Law |
| The law of agency |
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7. An agent's relations with third parties |
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7.2. Disclosed and undisclosed principals |
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Read the facts below, and then answer the questions. A negotiates a contract to purchase some computer software for $2,000 from B. The sale contract is in writing and is signed by both A and B. During the negotiations A does not say anything about being an agent for anyone, but when signing the contract, A writes "pp XYZ Pty Ltd" immediately below his signature. XYZ Pty Ltd is a company owned by A, of which he is the sole director. He intends to acquire the software for the company. (Note: 'pp' means 'pro procurationem' or 'on behalf of'). |
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1. In these circumstances, does A become a party to the contract of sale? 2. If A had authority to purchase computer software for the company, but he signed the contract without adding "pp XYZ Pty Ltd", would the company (an undisclosed principal) be entitled to enforce the agreement against B? |
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