Third-Party Relations of the Principal and the Agent

Advanced Business Law HW 4- Third-Party Relations of the Principal and the Agent
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Case 36-7 Treadwell v. J.D. Construction Co
I JUDGMENT
Treadwell signed a contract with J.D. Construction and did not know JCDER INC, the undisclosed principal (Prenkert, 2019). Therefore, Derr, who owned JCDER INC, failed to complete the work, and the contract was made for the undisclosed principal, and the agent is liable.
II LEGAL PRINCIPLE
A. ISSUE
Is Derr personally liable for signing a contract on behalf of a non-existent corporate entity (J.D. Construction Co)?
B. HOLDING
An unidentified principal exists, but their identities are hidden as the agent fails to disclose or misleads the third parties.
III REASONING
A GENERAL ANALYSIS
JCDER, Inc is the undisclosed (unidentified) principal JCDER Inc., and regardless of whether the principal’s identity is disclosed, partially disclosed, or undisclosed, the principal has a duty to perform. Additionally, an agent is also liable as a party to the contract. Generally, an agent is not liable for an authorized contract made on behalf of a principal, and the principal is liable. However, in the case of an undisclosed principal, the agent is liable if there is a lack of authority and the agent enters into the contact in their personal capacity.
B . APPLIED ANALYSIS
An agent’s Liability for Contracts partly depends on disclosure about the principal, and in this case, there was a contact between Treadwell and J.D. Construction, Co., Inc.
IV JUDGMENT
Derr was personally liable for the contracts as an agent for th...