Contracts Keyed to Frierback
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A landlord signed a thirty-year lease with a tenant for a wire-hanger factory. The lease provided that the tenant pay $100,000 rent per year plus all taxes due on the factory. The tenant had an option in the lease to purchase the premises at any time for $1,000,000 in cash. The landlord conveyed the factory to a buyer soon thereafter. The tenant assigned the lease to a sublessee without mentioning the clause specifying payment of taxes
Must the sublessee pay taxes?CorrectIncorrect
A landlord owned residential property in a city. The maintenance for some of his properties became economically burdensome during the oil crisis. In 1974, the landlord decided to abandon an ocean-front apartment building when he could not find a buyer. The building rapidly deteriorated and was vandalized considerably. When the state legalized gambling, the value of the landlord’s building skyrocketed. The landlord turned down several multimillion dollar offers for his abandoned building. He assumed the value would continue to rise. He had good information that the new casino was to be built to the east of his property and that another casino was to be built to the west. However, both casinos were concerned that the landlord’s building would be an eyesore, and offered to pay for the building’s demolition. Finally, in 2007, the landlord signed a contract to sell the land to a corporation, represented by a married couple, who planned to build a theme park and a casino on the landlord’s property. “The Lord should receive money from blackjack and craps, not only from bingo,” said the husband at a press conference. The landlord was to receive 3 percent of the casino’s profits in exchange for his land.
The married couple was forced to resign from their corporation several months later when the corporation experienced severe financial difficulties. As part of their economic retrenchment, the corporation announced that they would not begin any new projects. The landlord’s building was in worse condition than ever before. Now, it was filled with nasty graffiti criticizing the wife’s makeup.
If the casino asserts an action against the corporation to compel performance of the contract with landlord, should the action succeed?CorrectIncorrect
The CEO of a pharmaceutical company wanted to reward his top salesperson. He knew that the salesperson’s daughter was applying to medical school, so he met with them both and told them that he entered into a contract with the dean of admissions at a prestigious medical school that would guarantee admission to the daughter. The CEO did not disclose that the consideration for this contract was actually an illegal bribe. The daughter submitted her application only to that school and did not send applications to any other schools. Shortly thereafter, the dean of the medical school was removed from his position for other misconduct. The replacement dean denied the daughter admission based on her mediocre grades and test scores, and the deadline had passed for submitting applications to other schools that might have admitted her.
Can the daughter successfully sue the CEO and the medical school for any damages she has suffered?CorrectIncorrect
A man loaned $10,000 to his good friend who was heavily in debt. He told his friend that he could have until the following June to repay the loan and to make repayment directly to the man’s grandson. The man knew that his grand- son, who would be graduating from law school in June, was hoping to buy a new car upon graduation and could use the money as a down payment on the car. Neither the man nor his friend told the grandson of this agreement. Before the friend repaid the $10,000 loan, the grandson went out and bought his dream car, cashing some savings bonds to make the down payment. A week later, the grandfather suffered a reversal of fortune and told his friend to pay the $10,000 to him after all, which the friend did. A short time later, the grandson learned of the aborted plan to pay the $10,000 to him.
If the grandson sues the friend for the $10,000, will he prevail?CorrectIncorrect
A retailer and a wholesaler entered into an agreement under which the retailer would make payment to one of the wholesaler’s creditors. Before the creditor became aware of the agreement, the retailer and wholesaler decided instead that the retailer would pay the wholesaler directly. The creditor sued to enforce the original agreement between the retailer and the wholesaler.
Which of the following statements is correct?CorrectIncorrect