Jones Hired Smith, a General Contractor, to Build a Garage

question 30

Multiple Choice

Jones hired Smith, a general contractor, to build a garage as an addition to Jones' home. Smith hired Adam to do the roofing work on this garage. All the work was done satisfactorily, and at the completion of the work, Jones paid Smith the agreed price. However, Smith never paid Adam for his work. Three weeks after Adam finished his work, he filed a mechanics' lien against the property and demanded that Jones pays him for his work. Which of the following is most correct?

• A) Jones need not pay Adam because he has already paid in full for the garage.
• B) Jones need not pay Adam because Adam's contract is actually with Smith in this case.
• C) Jones should pay Adam because Adam has the right of redemption.
• D) Jones should pay Adam because Adam can enforce his lien claim against the property.

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Definitions:

Public Good

A product or service that is provided without profit to all members of a society, either by the government or a private individual or organization.

Nonexcludable

A characteristic of a good where it is not possible to prevent individuals from accessing or consuming the good.

Nonrival Consumption

A situation where one individual's consumption of a good does not reduce the amount available for consumption by others.

Private Goods

Goods that are excludable and rivalrous in consumption, meaning they can only be used by one person at a time.