Kuwait Court of Cassation principle number 562

Summary: - Conclusion of a contract by an agent. Permissible in his capacity as principal, not as agent. Condition: if he does not disclose his representative capacity at the time of contracting. This constitutes an undisclosed agency. Its implication. The effects of the contract accrue to the principal, and the agent is deemed to have lent his name to the principal. This undisclosed agency is governed in the same manner as disclosed agency. Effect: the effects of the contract accrue to the principal and to the person contracting with the undisclosed agent. Rule: It is settled that an agent may conclude the contract which the agency authorizes him to execute, not in his capacity as agent but in his capacity as principal, if he does not disclose his representative capacity at the time of contracting. He is deemed to have lent his name to the principal who authorized him to conclude the contract. The rule governing this undisclosed agency is that it produces, in relation to the principal, all the legal effects produced by disclosed agency. Thus, the effects of the contract accrue to the principal and to the person contracting with the undisclosed agent, who is legally prohibited from appropriating for himself anything he was authorized to obtain for his principal’s account. This requires that the capacity, as between the principal and agent, be regarded as having been effected in the principal’s interest and for his account, so that he acquires all rights arising from the contracting, while the agent acquires none of those rights and may not resort to any device to appropriate the transaction to the exclusion of the principal.