Yoshi contracts with Zach to buy a certain pub, Aficionado's, for Yoshi, who asks Zach not to reveal her identity. Zach makes a deal with Burcet, the owner of the pub, and makes a down payment. Yoshi fails to pay the rest of the price, and does not pay Zach for his services. Does Zach have any recourse against Yoshi? If so, on what basis and to what extent?

Answer 1

Zach can seek to hold Yoshi liable for breach of contract, and Yoshi may be liable for whatever damages Zach has to pay to Burcet, and more.
With respect to the contract with Burcet, a prin-cipal has a duty to in-demnify an agent for liabilities in-curred because of authorized and lawful acts and transactions and for losses suf-fered because of the princi-pal's failure to per-form his or her duties.

With respect to payment for Zach's services, if an agent is not a gratuitous agent (that is, one who does not perform for money), a principal owes the agent com-pensation for his or her services rendered. In the facts of this question, if no amount had been agreed to, Yoshi would owe Zach the customary amount for his services. Of course, payment must be timely, and there may be a penalty associated with the delay. Also, a principal's duties include the responsi-bility to reimburse an agent for expenses related to the agency, unless the parties have agreed otherwise. Thus, Yoshi may owe an amount for Zach's disbursements, including the down payment, and other ex-penses, as well.