Question

Harold wants to purchase a lot next door to Sarah's home that is owned by Sarah. Herold knows Sarah will not sell the lot to him because they dated in the past and had a nasty break-up. Herold agrees with Alice that Alice will purchase the lot from Sarah for him. Alice and Sarah reach an agreement and enter into a contract whereby Sarah is to sell the lot to Alice for a price within the scope of Alice's authority. Alice tells Sarah nothing about her plan to later transfer the lot to Herold. Before title to the lot is transferred to Alice, Herold tells Alice that he no longer wants the lot. Alice tells Sarah about Herold. Sarah tells Alice that as far as she is concerned, Alice has bought the lot. Sarah says that she plans to move anyway and really does not care whether Alice or Herold ends up with the lot. She just wants her money. What type of principal is Herold

Answer 1

Answer:

Undisclosed principal

Explanation:

Am undisclosed principal in an agency relationship is one whose existence is not known to the third party. The third party believes they are making the transaction with the only agent involved in the transaction.

In this instance Sarah believed she was selling to Alice and was not aware Alice has a principal (Harold). In her mind she sold the land to Alice and no other person.

It was at the point where Harold said he no longer wanted the land that Alice told Sarah about him. At this point the contract between Harold and Alice had been terminated