Why might a principal be liable despite a third party's fraudulent concealment of their existence?

In the context of agency law, a principal can indeed be held liable even if a third party fraudulently conceals the principal's existence. This situation often arises under the principle that a valid contract may have been made under the authority granted to an agent, regardless of the third party’s deceptive actions.

When an agent acts within the scope of their authority, they are representing the principal in dealings with third parties. If the agent has the authority to enter into contracts on behalf of the principal, the principal is still bound by those contracts, as long as the third party believed they were dealing with the principal through the agent. This holds true even if the third party engaged in fraudulent conduct to conceal a material fact, such as the existence of the principal.

The liability of the principal stems from the nature of agency relationships and the authority granted to agents. If a contract validly exists due to the agent acting within their authority, the principal can be held accountable for the obligations arising from that contract, irrespective of any fraudulent concealment perpetrated by the third party. Therefore, the focal point is on the valid authority of the agent, which sustains the principal's liability.