Basic Carpet Contracts to Install Stain-Resistant Carpet in Alice's House

question 38

Essay

Basic Carpet contracts to install stain-resistant carpet in Alice's house for $6,000.Basic Carpet then assigns the right to receive payment from Alice to Home Finance Company.When payment comes due,Alice refuses to pay more than $2,000,asserting that the installed carpet was not stain-resistant.Home Finance asserts that Alice must pay $6,000,since Home Finance was not responsible for installing the carpet.Alice decides to sue Basic Carpet.Discuss the case.

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Definitions:

Port Facilities

Infrastructure and services provided at a port to support the loading, unloading, maintenance, and storage of ships and their cargoes.

Absolute Advantage

The ability of a country, company, or individual to produce a good or service more efficiently than competitors, using fewer resources.

Monopoly

Market situation in which a single seller dominates trade in a good or service for which buyers can find no close substitutes.

Less-developed Countries

Nations with a lower standard of living, underdeveloped industrial base, and low Human Development Index (HDI) relative to other countries.