Agency page 1
Sealy and Hooley, Chapter 5: ‘Relations with third parties’, pp.147–57.
The disclosed principal (or disclosed agency) is where the existence o the principalis disclosed. The disclosed principal may be named (that is, identied) or unnamed(unidentied).As has been seen, the general rule is:
United Kingdom Mutual Steamship Association
Lord Scarman preerred a rather dierent emphasis. His view was that everyone is liableor their contracts, even where they act or another, unless they can show that this liabilityis removed by the law o agency (
Yeung Kai Yung
Hong Kong and Shanghai Banking Corpn
 AC 787 at 795; Hooley and Sealy, p.158).The principal may sue or be sued on the contract with the third party i the agent disclosesthe agency and:acts within actual authorityacts without actual authority and the principal raties.It should be pointed out that the principal may be sued on the contract i the agent actswithin apparent authority, but cannot sue the third party without ratication.In response to a claim by the disclosed principal, the third party can use:any deence or claim arising rom the contractany deence or claim available against the principal.A deence or claim available against the agent and unconnected with the contract cannotbe used against the principal.
In general, payment by the third party to the agent does not constitute payment to theprincipal. A third party can only discharge a debt owed to the principal by paying the agentin a limited number o circumstances (
Irvine & Co
Watson & Sons
 5 QBD 414. SeeSealy and Hooley, pp.150–53):i an express or implied term o the contract species this method o paymenti the principal is estopped rom denying the right o the third party to pay the agentbecause such payment was induced by a representation by the principali the agent has actual authority rom the principal to receive paymenti this method o payment was ratied by the principal: or example, the third party will bedischarged i payment is made to the agent, who had no authority to receive payment, andthe agent passes that payment to the principal, who accepts it.These situations may be reversed. For example, in
Marquis of Hertford
 3 East147, the third party gave the agent a receipt or payment and the principal, thereore, paidthe agent. In act, the agent had made no payment, but it was held that the principal wasnot liable to the third party.