In Keighley, Maxted & Co v Durant (1901), A was authorized by P to buy wheat at 44s 3d a quarter on a joint account for A and P. Wheat was unobtainable at this price and, therefore, A agreed to buy from T at 44s 6d a quarter. Though he intended to buy it on behalf of himself and P, A contracted in his own name and did not disclose the agency to T. The next day P ratified the purchase at the unauthorized price but, in due course, P and A failed to take delivery. It was held by the House of Lords that P was not bound by any contract with T. It is unclear what the position would be if A said he was acting as an agent but did not disclose his principal. Where, however, the agent has purported to act for a principal while, in fact,…show more content…
He found the evidences for the respondents (buying on behalf of K & Co.) unsatisfactory and observed that there was no evidence that the appellants, by any communication, conduct or dealing with the respondents, ratified or adopted their contract with Roberts. He said that the result of such judgment of the court of appeal is to give one of two contracting parties in his option, merely from what was passing in his own mind and not disclosed, the power of saying the contract was his alone, or a contract in which others were bound with him.
Lord James of Hereford
He also agreed to the same. He observed that D contracted with Roberts alone and he knew of no disclosed principal other than Roberts, and there was no undisclosed principal. He pointed out the fact that an undisclosed principal must exist at the time of the contract and such principal cannot be brought into life after the contract has been made without any recognition of his existence.
He also allowed the appeal and made a crucial point that “the rule which permits an undisclosed principal to sue and be sued on a contract to which he is not a party, though well settled, is itself an anomaly, and to extend it to the case of a person who accepts the benefit of an undisclosed intention of a party to the contract would, in my opinion,