CASE ANALYSIST

HYPOTHETICAL CASE 1

Richard Oglethorpe owes Tammy Abramowitz $5,000 on a promissory note due and payable on November 1. On November 5, Abramowitz contractually transfers the right to receive the $5,000 to Kevin Albee in payment for a car Albee sold her. As part of the transaction, Abramowitz endorses the promissory note and transfers possession of the note to Albee. On November 7, Kevin notifies Oglethorpe that he is in lawful possession of the note and demands payment from Oglethorpe. Oglethorpe refuses to pay, claiming he owes no obligation to Albee, since he has never contracted with Albee.

Question: Is Richard Oglethorpe obligated to pay Kevin Albee the $5,000? If yes, what third party rights rules applies?

HYPOTHETICAL CASE 2

Michael Angelo is renowned as the house painter to the stars. His craft is well known throughout Hollywood, he is in high demand, and he has limited his work to celebrity homes valued at $2 million or more. Sandra Anderson, a film star, commands at least $20 million per film. Her net worth is rumored to be in excess of $100 million. Anderson has sought and secured Angelo's services to paint her new home nestled in the Hollywood Hills. When completed, Sandra's new home will be worth an estimated $2.25 million. Angelo is extremely busy. He is currently painting three homes for three different movie stars: Damian Guilden, Tommy Davis, and Brad Dennis. He would like to have his associates, Jim Bartholomew, and Buddy Head, perform the painting of Sandra's house. Bartholomew is 21 years old and has three years of house painting experience, while Head is twenty-seven and has four years of experience.

Question: From a contractual standpoint, may Michael Angelo have his associates, Bartholomew and Head, paint Anderson's house? Would such an arrangement require Anderson's approval? If yes, why? If no, why not?