What characterizes a disclosed principal?

A disclosed principal is characterized by the fact that their identity is known to third parties when an agent enters into a contract on their behalf. This means that the third party is aware that the agent is acting on behalf of a specific principal, which allows the third party to understand who they are contracting with and what their rights and obligations are.

Understanding this concept is key because it affects the liability of the parties involved. When the principal is disclosed, the third party can seek performance or redress directly from the principal, rather than from the agent. Knowing the principal's identity helps facilitate trust and clarity in business transactions, making it easier for parties to engage in contracts with clear expectations.

In contrast, the other descriptions do not accurately capture the essence of a disclosed principal. For example, if a principal's identity is unknown to third parties, this would represent a hidden or undisclosed principal, not a disclosed one. Therefore, option B accurately reflects the definition and characteristics of a disclosed principal in agency law.