Watteau v. Fenwick (1893)

Contract II (Special Contracts) · Agency

Facts.

The owner of a hotel employed a manager, forbidding him to buy certain goods (cigars) on credit. The manager, whose name was over the door, bought cigars on credit from a supplier who did not know of the owner. The supplier, on discovering the owner, sued him.

Issue.

Is an undisclosed principal bound by an act within the usual authority of such an agent, though he had secretly restricted it?

Held.

Yes. The principal was bound, because buying such goods was within the usual authority of a manager in that business; the secret restriction did not affect the innocent third party.

Why it matters.

It illustrates the reach of an undisclosed principal’s liability (Topic 8) via usual/apparent authority.

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