Shortly after the case was brought, Worrell filed for bankruptcy. Explain whether Musil is personally liable on the contracts.
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Frederick “Rick” Worrell conducted business as WRL Advertising. However, WRL Advertising was not a legal entity in its own right, but rather a trade name for Wingfield, Bennett & Baer, LLC, which is owned and operated by Worrell. Martha J. Musil, an employee of WRL Advertising, placed advertising orders with the Plain Dealer Publishing Company at the direction of her employer. Musil communicated to the Plain Dealer that she was working on behalf of WRL Advertising. WRL did not pay for all of the advertising, and the Plain Dealer sued Worrell and Musil. Shortly after the case was brought, Worrell filed for bankruptcy. Explain whether Musil is personally liable on the contracts. |
Verified Answer
Individual M is not legally responsible because Individual M exposed the principal's name and identity and was, thus, not working on behalf of a nonexistent or fictional principal.
The parties do not deny that Individual M told Company P that Individual M is serving on behalf of a principal, so that Individual L is not held liable for any of the contracts.
In Country O, where an agent contracts in the name of a nonexistent or fictional principal or presumes to serve as an agent for a principal, who has no legal standing or life, an agent is liable to a third party. Individual M did not, however, operate on behalf of a fictional corporation or organisation, which may not exist in Country O, but instead acted for Business W, which is CompanyW's fictional identity.
