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Cooke & Sons v Eshelby (1887)

Facts

  • An agent sold cotton wool, sometimes on behalf of a principal (Eshelby)
  • An agent sold some wool to Cooke & Sons with Eshelby as an undisclosed principal

Issue

  • Could Eshelby sue Cooke & Sons for the price of the goods as undisclosed principal?

Decision

  • Yes

Reasoning

  • A third party is expected to assume that he is dealing with an undisclosed principal if an agent could have been dealing on his own or on behalf of an undisclosed principal
  • A third party should ask if he is unsure; if the ‘agent’ then lies, the resulting contract will be voidable for misrepresentation
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