Author Question: In Cove Management v. AFLAC, Galgano, an independent contractor who solicited insurance business for ... (Read 83 times)

joesmith1212 · **on:** Jun 24, 2018

In Cove Management v. AFLAC, Galgano, an independent contractor who solicited insurance business for AFLAC, rented office space from Cove under AFLAC's name. When Galgano defaulted on payments, Cove sued AFLAC contending that Galgano was its agent when he rented the office, so AFLAC was liable. The appeals court held that AFLAC was liable as it had given Galgano apparent authority to make the lease.
a. True
b. False
Indicate whether the statement is true or false

Question 2

Equal Credit Opportunity. Sebastian and Maria Shaumyan entered into a home im-provement contract with Sidetex Co Sidetex agreed to install siding, replace windows, and perform other related work at the Shaumyan's home, and the Shaumyans agreed to pay Sidetex a total of 14,800 according to the following schedule: 3,000 as a deposit; 4,000 when Sidetex began the work; 3,900 when the work was half completed; 1,950 on completion of the installation of the siding; and 1,950 on completion of the work on the storm doors and shutters. Although a clause in the agreement referred to the contract as a consumer credit contract, the Shaumyans' payments were not subject to any finance charges. Sidetex commenced work under the contract, and the Shaumyans made the scheduled payments of 3,000, 4,000, and 3,900. Performance was not completed, however, because a dispute arose concerning the quality of the windows that Sidetex was to install. The Shaumyans brought an action against Sidetex to recover damages, claiming that Sidetex had violated the antidiscrimination provision of the Equal Credit Opportunity Act (ECOA) by requiring the signature of Mrs. Shaumyan on the home improvement contract. The central issue before the court was whether the home improvement contract, which provided for progressive payments by the Shaumyans, constituted a credit transaction subject to the antidiscrimination provisions of the ECOA. How should the court rule? Discuss fully.

recede · **Reply #1 on:** Jun 24, 2018

Answer to Question 1

TRUE

Answer to Question 2

Equal credit opportunity
The court held that the home improvement contract did not constitute a credit transaction and therefore was not subject to the antidiscrimination provisions of the Equal Credit Opportunity Act (ECOA). Under the ECOA, credit is defined as the right granted by a creditor to a debtor to defer payment of a debt or to incur debts and defer its payment or to purchase property or services and defer payment therefore. In view of this definition of credit, the court found that absent a right to defer payment for a monetary debt, property or services, the ECOA is inapplicable. The contract between the Shaumyans and Sidetex was not deemed a credit transaction because the contract did not permit the Shaumyans to defer payment for Sidetex's performance. Rather, the contract provided for a payment schedule that obligated the Shaumyans to pay for the work as the work was completed. The court found these payments to be substantially contemporaneous with Sidetex's performance. The fact that a provision of the contract referred to the contract as a credit contract was not controlling.