Undisclosed principal

An undisclosed principal involves a scenario where an agent enters into a contract or transaction on behalf of a principal whose identity is not revealed to the other party. In Jamaica, this concept is pertinent in real estate deals and various contractual arrangements. For example, a real estate agent might negotiate a property purchase or sale without disclosing that they are acting for a specific client. This allows the agent to conduct business on behalf of the principal while keeping the principal’s identity confidential. Globally, this arrangement is generally accepted, with the understanding that the contract remains binding even if the principal’s identity is not known to the third party. The UK case Keighley Maxted & Co v. Durant (1901) illustrates this principle, where the court affirmed the validity of contracts made by agents for undisclosed principals. In Jamaica, a similar principle is reflected in common law practices, where transactions facilitated by agents for undisclosed principals are generally upheld, ensuring that agreements made by agents are valid and enforceable, regardless of the principal’s anonymity.