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Evan enters into a contract with Right Construction Ltd. for the construction of a wine cellar. The house is open concept and Evan wants the wine cellar accessible from the kitchen. Access from the kitchen was not provided as agreed in the contract. Evan sues Right Construction Ltd. seeking $100,000 in damages. He is successful, but discovers that Right Construction Ltd. does not have assets to satisfy the judgment as it regularly transfers its assets to its parent company All right Company Inc. Can Mr. Black collect the $100,000 from All right Holding Company Inc. Multiple Choice Yes, this is a statutory novation No, according to the doctrine of privity of contract

Evan enters into a contract with Right Construction Ltd. for the construction of a wine cellar. The house is open concept and Evan wants the wine cellar accessible from the kitchen. Access from the kitchen was not provided as agreed in the contract. Evan sues Right Construction Ltd. seeking $100,000 in damages. He is successful, but discovers that Right Construction Ltd. does not have assets to satisfy the judgment as it regularly transfers its assets to its parent company All right Company Inc. Can Mr. Black collect the $100,000 from All right Holding Company Inc. Multiple Choice Yes, this is a statutory novation No, according to the doctrine of privity of contract

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Evan enters into a contract with Right Construction Ltd. for the construction of a wine cellar. The house is open concept and Evan wants the wine cellar accessible from the kitchen. Access from the kitchen was not provided as agreed in the contract. Evan sues Right Construction Ltd. seeking $100,000 in damages. He is successful, but discovers that Right Construction Ltd. does not have assets to satisfy the judgment as it regularly transfers its assets to its parent company All right Company Inc. Can Mr. Black collect the $100,000 from All-right Holding Company Inc. Multiple Choice Yes, this is a statutory novation No according to the doctrine of privity of contract Yes, according to the Statute of Frauds Yes, according to the doctrine of promissory estoppel
Transcribed Image Text:Evan enters into a contract with Right Construction Ltd. for the construction of a wine cellar. The house is open concept and Evan wants the wine cellar accessible from the kitchen. Access from the kitchen was not provided as agreed in the contract. Evan sues Right Construction Ltd. seeking $100,000 in damages. He is successful, but discovers that Right Construction Ltd. does not have assets to satisfy the judgment as it regularly transfers its assets to its parent company All right Company Inc. Can Mr. Black collect the $100,000 from All-right Holding Company Inc. Multiple Choice Yes, this is a statutory novation No according to the doctrine of privity of contract Yes, according to the Statute of Frauds Yes, according to the doctrine of promissory estoppel
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