Dummy purchaser

Dummy purchaser

A dummy purchaser is an agent who buys property on behalf of another, usually to conceal the true purpose of the acquisition. For instance, a shopping mall developer may hire a dummy buyer to purchase the needed vacant lots. Disclosing the principal's identity might prompt the landowners to hold out for a higher price; hence the need for secrecy. It has been hypothesized that dummy buyers could help private sector developers obtain the land needed for highway construction without the need for eminent domain invocation.[1] A principal in such a relationship may be a partially disclosed principal (i.e. the agent informs the seller that he is buying on behalf of someone, but does not reveal that person's identity) or a completely undisclosed principal (i.e. the agent does not reveal that he is acting on anyone's behalf). A dummy purchaser is also sometimes called a straw man.[2]

See also

References

  1. ^ Benson, Bruce L. (2006). "Do Holdout Problems Justify Compulsory Right-of-Way Purchase". Street Smart: Competition, Entrepreneurship, and the Future of Roads. pp. 48. 
  2. ^ Glossary

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