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Why did continental European law place greater importance on an agent openly acting in the principal’s name?

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agency Portrait of Hugo de Groot (Hugo Grotius), oil on panel by the workshop of Michiel Janszoon van Mierevelt, 1631; in the Rijksmuseum, Amsterdam.

Continental European law places significant importance on an agent acting openly in the principal’s name due to the historical development of its civil law systems, which favored conceptually systematic and narrowly defined legal doctrines.1

This emphasis is rooted in the 19th-century "disclosure principle" (Offenheitsprinzip), which dictates that an agent’s actions create direct legal consequences for a principal only when the agent explicitly discloses that they are acting on the principal's behalf. Under this framework, if an agent fails to disclose their representative capacity, the transaction is viewed as binding only the agent personally, leaving the "hidden" principal uninvolved.12

This approach contrasts with common law traditions, which developed more flexible, commercially oriented rules that allow for undisclosed agency. While continental systems eventually distinguished between the agent's power to create legal obligations and the internal contract between principal and agent, they maintained that the agent's open disclosure is essential to preserve the principal's private autonomy within the legal transaction.21