Question 1
Privity of contract applies in which of the following situations?
◦ where an insurance contract is involved
◦ where a trust has been created
◦ where goods are being sold
◦ where an interest in land is involved
◦ where a trust is involved
Question 2
Mr. Jans owned a small building with four offices upstairs and a restaurant on the main floor. Jans contracted with a company, Signs Limited, to construct a sign indicating the names of his tenants and their room numbers. The sign was created and installed by John Monet, an employee of Signs Limited. Signs Limited assigned $500 of the $700 contract price to Ms. Franz, its landlord, when she called and pressed for the rent. Ms. Franz gave notice of the assignment in writing to Jans. Read the following statements, independently of one another, and indicate which is the true statement.
◦ Franz cannot enforce this assignment because the assignment was not in writing, and only assignments in writing will be enforced by the courts.
◦ If the contract were completed satisfactorily, Franz could enforce the assignment, although it is a partial assignment.
◦ If the assignment is not honoured by Jans, Franz's only recourse is to sue Monet, the employee who actually did the work.
◦ If Signs Limited fails to pay Monet's salary, Monet is legally entitled to sue Jans for it because Monet did work for Jans.
◦ If the sign were not done properly, Jans should sue Monet for breach of contract because Monet, as employee, did the work.
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