If an agent fails to disclose their status as an agent, who can the other party pursue upon discovering the contract is with an undisclosed principal?

When an agent fails to disclose their agency status and enters into a contract on behalf of an undisclosed principal, the contracting party has the right to pursue either the agent or the principal once they discover the existence of the undisclosed principal.

This principle is rooted in agency law, where agents act on behalf of principals. If the principal's identity is hidden, the other party is entitled to seek recourse from the agent, as the agent is the one who executed the contract, and they are, in a way, acting on their behalf as if they were the contracting party. Conversely, the principal can also be liable for the contractual obligations because the agent acted within their authority, albeit without proper disclosure.

This dual liability encourages transparency and fairness in contractual dealings, as it protects the interests of the third party who engaged in the contract based on the actions and representations of the agent. Thus, if the other party later learns of the undisclosed principal's existence, they can choose to pursue legal claims against either party, depending on the circumstances and their chosen legal strategy. This flexibility ensures they can seek recovery from the party that is most readily able to fulfill the contractual obligations.