The central thesis of this article is that there is no general principle of agency law by which an agent is treated by the law as the alter ego of his principal (regardless of whether the principal is a natural or legal person) so that he will automatically ‘‘drop out’’ and escape liability. This fallacy is most troublesome in the areas of tort and unjust enrichment. The reasons why an agent may, or may not, ‘‘drop out’’ will be examined in four areas: contract, passing of title, tort and unjust enrichment.

The general rule is uncontroversially stated by Bowstead and Reynolds :1

In the absence of other indications, when an agent makes a contract, purporting to act solely on behalf of a disclosed principal, whether named or unnamed, he is not liable to the third party on it. Nor can he sue the third party on it.

Does this principle follow from the application of a rule specific to the law of agency? It is submitted that it does not. The result follows from the general law of contract. Where the agency is disclosed, it is (objectively) apparent to the third party that the counter-party is the principal and not the agent. The agent can therefore neither sue nor be sued on the primary contract. This will be so even where the agent is unauthorized and the agent merely has ostensible authority.2 Who the correct parties to the deal are is as much a matter of proper construction as any other contract term.3