Question

Yoshi hires Zach to buy certain equipment for Yoshi’s restaurant. Yoshi asks Zach not to reveal her identity or even that she is the purchaser. Zach makes a deal with Burcet, the owner of the equipment, and makes a down payment. Yoshi fails to pay the rest of the price, and does not pay Zach for his services. Does Burcet have any recourse against Zach or Yoshi? Does Zach have any recourse against Yoshi? If so, on what basis and to what extent?

Answer 1

Burcet would have recourse against Zach, but not Yoshi. The reason is that it is based on the agent-principal relationship, and in undisclosed principal identity the agent becomes the party in contract. Yoshi s not involved in the contract and agreements thus not tied to pay any amounts if he denies, thus not bound by law to pay. In this case now the agent in becomes the principal thus will be liable for all the accrued costs and liabilities.

Now a legal agreement is created between Zach and Burcet. Zach performed the acts within the scope of his authority and makes a down payment for buying pub from Burcet. But when Yoshi does not pay the balance amount of pub and for services rendered by Zach who is expressly authorized in the contract; Zach would have recourse against Burcet and Yoshi will be required to refund the accrued amount of services and cost of pub.