In general-the question frequently arises whether the principal may be affected not only by the agent's acts and contracts, but also by the knowledge which he may possess, or the notice which may come to him, respecting the subject matter of the agency, and which would have affected the principal had it come to him while he was acting in person. The question has arisen in a great variety of forms, but the answer has been substantially uniform, and is commonly found stated in the language of the following section. Many reasons have been assigned, but they are all predicated upon the injustice which would result if the principal should be permitted to put forward an agent to transact business for him and at the same time escape the consequences which would have ensued from knowledge of conditions or notice of the rights and interests of others had the principal transacted the business in person. "Policy and the safety of the public," it was said in a leading case, "forbids a person to deny knowledge while he is so dealing as to keep himself ignorant, or so that he may keep himself ignorant, and yet all the while let his agent know, and himself perhaps profit by that knowledge: In such a case it would be most iniquitous and most dangerous, and give shelter and encouragement to all kinds of fraud, were the law not to consider the knowledge of one as common to both, whether it be so in fact or not."

Included in

Agency Commons