Question

Walt is a wealthy businessman from out west. He wants to buy some property in Florida, but he's concerned that if the seller, Donald, knows that he's the buyer, the seller will insist on a higher price. So he sends his agent, Mickey, to Florida to buy the property (you may assume that Mickey has full agency authority). He instructs Mickey not to tell Donald that he is acting as an agent for Walt. In fact, to be safe, he informs Mickey not to even tell Donald that he is even acting as anyone's agent. Mickey and Donald negotiate, reach an agreement, and enter into a written contract.

Donald later learns that Mickey wasn't the principal, but Walt was. And Donald would have held out for a higher price if he knew that Walt was the real principal. Donald wants to rescind the contract. Can Donald rescind the contract or is he bound to it? Why?

Answer 1

No, Donald can not rescind the contract because Donal signed a written contract with Mickey and that is legal contract which is enforceable to both even Donal does know or not know that Mickey is an agent bu Donald made contract with Mickey as a party who agrees to sell to other party and both agrees.

Also Under Principal-agent rule, Agent is liable to work in the benefit or interest of principal and do what principal says and Mickey did the same.

in short, Both Donald and Micky made a written agreement which both has to perform after the performance it is duty of Mickey to give the property back to Walt.