Homework #1:
1. Marian contracted to sell her restaurant to Billings for $400,000. The contract provided that Billings would pay $100,000 and sign a note for the remainder. Billings sold the restaurant to Alice, who agreed to assume responsibility for the balance due on the note held by Marian. But Alice had difficulties and declared bankruptcy. Is Billings still liable on the note to Marian?
2. Rusty told Alice that he'd do the necessary overhaul on her classic car for $5,000 during the month of May, and that when the job was done, she should send the money to his son, Jim, as a graduation present. He confirmed the agreement in writing and sent a copy to Jim. Subsequently, Rusty changed his mind. What right has Jim?
3. Rollins sold Byers, a businessperson, a flatbed truck on a contract; Rollins assigned the contract to Frost, and informed Byers of the assignment. Rollins knew the truck had problems, which he did not reveal to Byers. When the truck needed $3,200 worth of repairs and Rollins couldn't be found, Byers wanted to deduct that amount from payments owed to Frost, but Frost insisted he had a right to payment. Upon investigation, Byers discovered that four other people in the state had experienced similar situations with Rollins and with Frost as Rollins's assignee. What recourse has Byers?
Homework #2:
On August 8, 1998, the plaintiff, Elaine Exercise, entered into a contract with the defendant, Cosmopolitan Spa International, Inc "CSI". The contract was for a spa membership that was to include "processing, program counseling, and facilities usage."
The written contract contained an exculpatory clause. The pertinent part of the clause stated, "Member fully understands and agrees that in participating in one or more of the courses, or using the facilities maintained by CSI, there is the possibility of accidental or other physical injury. Member further agrees to assume the risk of such injury and further agrees to indemnify CSI from any and all liability to CSI by either the Member or third party as the result of the use by the Member of the facilities and instructions as offered by CSI." On or around January 1, 2000, CSI sold the spa to Holiday Spa, Inc. On February 25, 2000, Elaine Exercise injured her back when she sat on an exercise machine and it collapsed under her. She brought suit against both CSI and Holiday for damages for personal injuries resulting from the defendants' negligence in properly maintaining the exercise machine. The defendants claimed that the exculpatory clause negated their liability. Elaine argued that Holiday could not use the exculpatory clause as a defense because it was part of a contract for personal services, and therefore the contract was not assignable. What will the court decide? Discuss fully.
Homework #3:
Most lease agreements (for an apartment - residential; or for space - commercial) contain a clause specifically addressing the right to assign the lease.
Use your favorite internet search engine and locate a lease agreement.
Find the clause dealing with assignment:
1. What is the URL of the lease that you found?
2. What does the clause say?
3. What would happen under the contract if the lessee assigned the lease?
4. What would happend under the common law if the lessee assigned the lease? (Hint: You might need to do a bit of additional research to answer this one.)