Nadia buys goods from a wholesaler on credit. The wholesaler does not know that she is buying as agent for Corbin Ltd, which has authorised the purchase. The goods are not paid for, and the wholesaler then discovers Corbin's involvement. What is the wholesaler's position?

Correct answer: C) It may elect to sue either Nadia or Corbin Ltd, but once it clearly elects one it cannot later sue the other

Explanation

This is the doctrine of the undisclosed principal. The agent is personally liable because the third party believed it was dealing with her alone. When the principal is discovered, the third party may sue the principal instead, but it must elect between them. A clear election to pursue one releases the other. It cannot recover twice.