A Reexamination of the Agency Doctrine of Election

The Restatement (Second) of Agency and several states provide that a third party suing an undisclosed principal and his agent must elect to take judgment against one, releasing the other from further liability. In contrast, when the existence of a principal but not his identity is disclosed at the time of agreement, a court may enter judgment against both the partially disclosed principal and his agent, releasing neither until the judgment is satisfied. The authors examine the theories and case law supporting the election doctrine in the light of public policy favoring complete disclosure. The authors conclude that a rule of release upon satisfaction of judgment should be applied to undisclosed principals and their agents.

In the context of a partially disclosed principal, however, courts should consider applying a rule of election to encourage full disclosure.