Holmes on agency and contract 1891 2

Notes on Oliver Wendell Holmes, "Agency" 5 Harv L Rev 1 (1891-1892).

Last post I briefly introduced Holmes' view that an agent has all and only those powers granted by the principal. He discusses an anomaly though which is instructive: "the rule that an undisclosed principal may sue or be sued on a contract made by an agent on his behalf" (1).

(A helpful discussion by Cristine Christodoulou is here; a law review article by Randy Barnett is here; an older paper by Grover Heyler is here; and of course Wikipedia is here.)

The oddball part of this is that an undisclosed principal can, in a sense, be party to a contract they didn't literally make (though their agent did). An undisclosed principal, aside from the havoc they represent in contract law, also runs counter to the philosophy of law, in that authority is natural (as I asserted in my previous post) but is conferred in virtue of the public recognition of that fact (as Holmes argues in his 1891). If a principal is undisclosed then there cannot be public recognition that they have conferred power on to an agent; hence, there was no such conferral, and the resulting contract is invalid.

So what to make of this anomaly of US and British law?

Let's first appreciate the bits of the philosophy of legal logic Holmes helps himself to in his discussion of public understanding (as the ostensive extension of powers).

1. Conferral is public and objectively accessible. The meaning of the powers is not impressionistic, mental, or private.
2. Ostension as pointing is pure referring and assigning; if it is mediated, it is the least mediated of all significations.
3. Extension as the objects referred to (that is, the agents granted this-or-that power).

The anomalous piece of law, observes Holmes, would "seem to follow very easily from the identification of agent and principal," a relationship resulting from the "power of contracting through others, natural as it seems, [that] started from the family relations, and that...has been expressed in the familiar language of identification" (2). The slave is the extension of the persona of the principal, growing from the family nexus in which slavery would have taken place in the Roman context. 

[B]y the Roman law contractual rights could not be acquired through free persons who were strangers to the family. But a slave derived a standing to accept a promise to his master ex persona domini. [ST--that is, slaves personify masters]...An obligation may be acquired through slaves or free agents in our power, if they take the contract in the name of their master. (2)

Not only did slaves thus have a privileged legal role in contract-making in ancient Rome (according to Holmes), but they did so in the context of their being identified with their master and their family. In a very real (and perhaps natural) legal sense the slave serves as a legal extension of the master. The transitivity of obligation thereby achieved suggests a domestic and intimate (albeit problematic) source of obligation in the natural state.