Normally, a person who is acting as an agent will make it clear to the third party with whom they are dealing that they (the agent) are acting as a representative of a principal. The third party therefore knows that, legally, they are entering into a legal transaction with the principal, and not with the principal's representative.
If an agent fails to inform the third party that they are acting as a representative of a principal, the principal is said to be 'undisclosed'. This affects the potential liability of the agent to the third party, who will have been led to believe that they are entering into a legal transaction with the person they are dealing with.