Painted House

question 52

Multiple Choice

Painted House.Billy had a contract to paint Jan's house for $800 including the duty to clean up any debris.The contract between Billy and Jan did not contain an anti-assignment clause.Billy,who was very busy,assigned the contract,including the right to payment and the duty to paint,to Richard who was interested in making some extra money and had experience painting.Billy did not tell Jan about the assignment because he did not want any trouble nor did Richard mention the assignment to her.In fact,Richard never met Jan because he painted while she was at work.After Richard did a good job painting the house,Jan sent a check to Billy for $800.Billy needed the money to pay some bills,so he spent it.He thought he would have money coming in with which to pay Richard,but that did not happen.Richard asked Jan for $800 when it was not forthcoming from Billy.Jan refused.Richard said that he was going to sue her and Billy.Jan called Billy and told him that he had no right to assign the contract.Another problem involved disposal of debris.Although Richard was a good,competent painter,he forgot and left some old paint cans at Jan's house.Jan demanded that Billy come and properly dispose of the paint cans because they could not simply be put in the trash.Billy refused and told her that she would have to get Richard to dispose of the paint cans because that was his responsibility.What would be the likely result of a lawsuit brought by Richard against Billy to recover the $800?

• A)Richard will win.
• B)Richard will win only so long as he had no reason to know that Billy had not given notice of the assignment to Jan and was,therefore,not on notice to notify Jan himself.
• C)Richard will win only if he can prove that he first brought a lawsuit against Jan and lost.
• D)Billy will win because Richard's only right of recourse is against Jan.
• E)Billy will win because Richard should have given notice to Jan himself.

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Definitions:

Sales Commissions

Payments made to salespersons or agents based on the sales they generate.

Product Costs

All costs incurred to acquire or produce the finished products that are sold to customers.

Income Statement

A financial statement that reports a company's financial performance over a specific accounting period, detailing revenues, expenses, and profits or losses.

Balance Sheet

A descriptor of a company’s financial health, enumerating assets, liabilities, and the stake of shareholders at an exact moment.