Question

Nasty Break-Up. Harold wants to purchase a lot next door to Sarah's home that is owned by Sarah. Harold knows Sarah will not sell the lot to him because they dated in the past and had a nasty break-up. Harold 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 Harold. Before title to the lot is transferred to Alice, Harold tells Alice that he no longer wants the lot. Alice tells Sarah about Harold. 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 Harold ends up with the lot. She just wants her money. What type of principal is Harold?

Answer 1

Harold should be considered an undisclosed principal.

Step-by-step explanation:

Basically Alice hid Harold's identity from Sarah, and she negotiated the purchase of the lot pretending to be the principal herself. Sarah was convinced that Alice was purchasing the lot for herself and not on behalf of someone else.

In this case, Alice is in trouble because she is personally bound on the contract with Sarah, and she doesn't seem to want the lot.