BLAW 308

On May 1, Amy and Bill entered into an oral agreement to open a dance studio called Kickers. Kickers leased space from Dubliner, agreeing to pay Dubliner 15% of the gross fees Kickers collected from its students for the right to use the leased space. Dubliner had no involvement in the management or operation of Kickers. The lease required a deposit of $500 which Amy paid. Amy and Bill both taught classes, and Bill handled the bookkeeping. They agreed to split the profits equally.

On May 15, Amy signed a contract with a sign fabricator to make a store-front sign for Kickers. The contract required Kickers to pay $4,000 for the design and fabrication of the sign and a monthly fee of $200 for a pole on which to display the sign.

Unbeknownst to Amy, on June 1, Bill started giving some of the more competitive dancers private classes in his basement, keeping the money he earned from those classes. He told the students Kickers was using his basement as an annex. On July 1, a student tripped on loose carpeting in Bill's basement and was injured.

Business was booming at Kickers, so on July 15, Amy and Bill hired another dance instructor, Maureen. Soon thereafter, they sold Maureen a 10% ownership interest in Kickers for $10,000 and deposited the money in Kickers' business account. Maureen agreed to share equally in the profits ofKickers.

On September 1, Amy and Maureen discovered Bill's side business when the injured student sued Amy, Bill, Maureen, Kickers and Dubliner. They also discovered that Bill had failed to pay the sign fabricator.

QUESTIONS:

Discuss:

1. the nature of the relationships between Amy, Bill, Maureen, and Dubliner

2. which of the defendants can be held liable for the student's injuries and the debt to the sign fabricator;

3. the extent of each party's liability (if any); and,

4. what claims Amy and Maureen can assert against Bill.