Answer to Question #227185 in Law for Olavi

Question

a) Discuss the doctrine of undisclosed principle as set out in the Springfield Omnibus Service Durban CC v Peter Maskell Auction CC & Another.                                  

 

Answer 1

Direct representation refers to the situation where someone (the representative or agent) is authorised by another (the principal) to perform a juristic act for and on behalf of the latter. Where the juristic act is a contract the parties to the rights and duties arising from the contract are the principal and the person with whom the agent contracts (“the third party”). The agent is not a party to the contractual rights and duties as such, having entered into the agreement not in his or her own name but on behalf of the principal. In the case of indirect representation someone (the representative or intermediary) is instructed by another (the principal) to conclude an agreement with a third party, in the representative’s own name, on the understanding that (i) the rights under the agreement are to be ceded to the principal by the representative, and (ii) the principal is to assume the obligations arising from the agreement and indemnify the representative against any liability incurred by the latter. In this scenario the representative is a party to the contract under his or her own name, and can be held liable by the third party to fulfil the contractual obligations imposed on the representative