undisclosed principal

An undisclosed principal is a person who authorizes an agent to act on their behalf without revealing their existence to the third party with whom the agent is dealing. This typically occurs when the agent either does not disclose that they are acting for another or claims to be acting on their own behalf. The purpose is to keep the principal’s identity confidential. Despite remaining anonymous, the undisclosed principal is still bound by and liable for acts of the agent, provided the agent acts within the scope of actual authority and in the principal’s interest. A principal may remain undisclosed to avoid influencing the transaction, such as when revealing their identity could lead to unfavorable terms. In disputes, the third party may pursue either the agent or, upon discovery, the principal.