Paper Mill Scenario
Applied Business Law
November 16, 2014
In this scenario, Delilah and I have an agency relationship. An agency relationship is where a principal engages an agent to carry out various duties on his or her behalf. This relationship involves delegating decision making powers to the agent by the principle; which means trust is a fundamental requirement for it to succeed. The agreement is that Delilah will negotiate the contract for wood pulp with the third parties. When ...view middle of the document...
I am the only one that can be held responsible in a disclosed principal contract. The contract that Delilah was negotiating with Felipe is considered a partially disclosed principal which means the identity of the principal was not known at that time but Felipe and Delilah were negotiating the contract on behalf of the principal. So either I or Delilah can be held accountable for this contract but not both of us.
The contract with Giorgio is known as an undisclosed contract in which the liability of an undisclosed principal and the agent is an alternative liability. It means that the third party can only make either the principal or the agent liable and not both of them together. With this contract Delilah and I will both be held accountable.