Question

What are some good reasons to refrain from disclosing an

agency or a principal's identity? Choose 2 answer choices.
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When a principal wishes to enter into
transactions, but is concerned that if third
parties knew his or her identity they would be
less likely to enter into the agreement
When a principal does not have adequate
resources in case he or she is held liable for
damages related to an agency relationship
When a principal wishes to avoid exposure to
liability

Answer 1

There are two main reasons to refrain from disclosing an agency or principal's identity: preserving bargaining power and protecting against liability.

Step-by-step explanation:

There are several good reasons for a principal or agency to refrain from disclosing their identity:

1. Preserving bargaining power: When a principal wishes to enter into transactions but is concerned that revealing their identity may make third parties less likely to agree to the agreement. By keeping their identity confidential, principals can negotiate better terms and maintain their leverage.
2. Protecting against liability: If a principal believes that disclosing their identity could lead to potential liability, they may choose to refrain from doing so. This protects them from being held responsible for damages associated with the agency relationship.

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