Fact Pattern 16-A1

question 18

Multiple Choice

Fact Pattern 16-A1
Business Properties, Inc. , contracts with Corporate Builders, Inc., to construct an office building. BPI agrees to obtain insurance to cover the project, after which the parties waive their rights against the subcontractors. BPI ob?tains the policy from Debit Insurance Company. When the new building is destroyed in a storm, Debit pays BPI and files a suit against the subcontractors.
-Refer to Fact Pattern 16-A1. Enterprise Corporation is the owner of an adjacent building, the value of which increased when BPI's new of?fices were built. Debit files a suit against Enterprise, claiming that Enterprise's neg?ligence con?tributed to the collapse of BPI's new building. Under the rea?soning of the court in Case 16.2, Midwestern Indemnity Co. v. Systems Builders, Inc., in relation to the waiver in BPI's contract with Corporate Builders, Enterprise would be

• A) an incidental beneficiary and thus not liable to Debit.
• B) an incidental beneficiary and thus possibly liable to Debit.
• C) an intended beneficiary and thus not liable to Debit.
• D) an intended beneficiary and thus possibly liable to Debit.

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Definitions:

Render Invalid

To make something null and void or to deprive it of legal force.

Construed

Interpreted or understood in a particular way, often referring to the way words or actions are perceived or legally interpreted.

Warranties

Promises made by a seller regarding the condition, functionality, or other aspects of a product or service.

Implied Warranty

A legal assumption that goods are fit for the purpose for which they were sold, even if not explicitly stated.