Exam 17: Third Persons and Contracts

Janet Jones sold the assets and liabilities of her coin-operated laundry to Kevin Katz for $10,000. The assets of the business included all of the washers and dryers. The liabilities included the amounts still owing on seven new dryers, which had been purchased recently from Dryer Company under an installment contract. Katz agreed to make the installment payments on the new dryers as they came due. After Katz failed to make an installment payment when it was due, Dryer Company sued Jones. Jones claimed she no longer was liable. How will the court decide?

An obligor required to render a performance under a contract can transfer the duty to perform to another person whenever desired.

Only parties who actually signed a contract may sue on it.

When work is guaranteed by one who repairs a building, the owner, on selling the building, may assign the guarantee to the buyer.

If a municipality contracts with a contractor to pave a street, the homeowners on that street are third-party beneficiaries of the contract.

Walker Meeks is currently a party to two contracts. On the first contract, he has agreed to paint a portrait of a gentleman riding a horse. This portrait is for the wall of the gentleman's study. The gentleman chose Meeks for his realism in portraying the true feelings behind portrait models. Meeks' second contract is to paint the house of Sylvia Sneed.?Meeks is offered an employment contract for a large sum of money. He wishes to accept, but this would render him unable to complete the aforementioned contracts. Meeks delegates the painting of the portrait to his friend Bob, an impressionist, and delegates the painting of Sylvia's home to Ted, a professional house painter.?Neither the gentleman nor Sylvia intends to allow the delegation to occur. Comment on the probable outcome of the dispute.

When duties under a contract are delegated, the party making the delegation remains responsible for the performance of the contract just as though no delegation had been made.

A life insurance contract is a third-party:

When a lease is assigned, the assignee becomes the sole obligor for rent payments, and the original lessee is discharged from the lease.

In a contract in which a tenant borrowed money from a bank for the purpose of adding a bathroom to her apartment, the landlord is: