QUESTION TWO, required: Contracts

Katherine Hogan.

age 82, lives by herself in a middle-class neighborhood in Patterson

NY (Putnam County) in the house she has lived in for the past fifty years.

She has bad

cataracts

John Finch

lives next door. He is 40, and lives alone there, but his children

stav

him on weekends. He has lived there for ten years. He has several different lines of

work going.

from handyman to

lawn care to part-time delivery truck driving.

He

nas

done small repair jobs over the years for his neighbor Katherine

Katherine

happens to be

outside in

her yard one day at the same time

that John is in his

vard, and she

asks

his advice.

She says that the windows on the west side of her

house, both stories,

are in very bad repair

I he

wooden frames have rotted, such that

in summer heat and insects get in.

and in winter the cold wind blows into the

rooms.

She is afraid that some of the six windows will fall right out of their frames altogether

John says oh, I think I can handle that for you.... Its a bigger job,

SO

I'll prepare

Estimate and go over it with you,

and if you agree,

we can both

sign the Estimate and

that will be our contract. Katherine says that's a good idea, so John goes in and

measures windows,

assesses the condition of the frames, and so on

He prepares the Estimate, which includes six new windows to be bought from Lowe's

or Home Depot; then materials to replace the framing into which the windows will be

set, miscellaneous other materials like caulking, fasteners,

etc., and an estimate of the

cost of his labor.

The total comes to $2500 for materials, and $2000 for labor,

for a

total of $4500. A first payment of $2500 is to be made at signing,

SO John can get the

materials, and the other $2000 is to be paid at completion of the job.

He calls

Katherine to let her know what the numbers are, and says that if those are acceptable

he will bring the Estimate over on the weekend.

She agrees over the phone to the

dollar amounts.

Katherine tells her son Jim,

age 50, what she is going to do, and he says it sounds

like a good idea at a reasonable price, but she should make sure that John is a licensed

home improvement contractor in Putnam County.

Katherine calls John and asks him if he is a licensed home improvement contractor in

Putnam County, and he says yes, he'll bring her a copy of his certificate of licensure

when he brings the Estimate.

Two days later John brings the Estimate over on a form that looks fairly official, with his

name, address, and phone number at the top, and then his Putnam County Home

Improvement Contractor License # just underneath that.

The Estimate lays

out the materials and labor (see above) and at the bottom of the form

provides signature and date lines for Customer and Contractor. Below

print, dark grey ink,

It says: See reverse for additional

And on the back, also in small print, dark grey ink, it says

The prices for materials for this job are based on the local prices as of the date of the

Customers signatures.

If materials prices go up by more than 5%, as documented by

Contractor, Customer agrees to pay the higher price for materials

It also says:

"Customer agrees that Contractor shall not be liable for damages due to negligent or

grossly negligent performance of the work."

John also brings with him a document that looks like a Putnam County Home

Improvement Contractor license awarded to him,

but is in fact a document he created

himself using Photoshop, Word, and other relevant creative tools.

Katherine inspects the "license" and the Estimate as well as she can,

but her vision is

blurry due to her cataracts.

She can see the numbers on the front of the Estimate.

Dut

can't really read the small font items on the back. However, trusting her neighbor of

many years, she signs and dates the Estimate, and makes the first payment.

John gets to work, and when he is finished, presents his bill for the second and final

Payment.

(A) MEANWHILE, Katherine's son

has visited and has looked at the documents. He

takes a picture of the "license" and sends it to

a friend who works in the licensing

division of Putnam Countv.

That person emails back that that is NOT a genuine

HIC license, and that none has been issued to a John Finch. Katherine's son

lets her Know.

ASSUME THAT THE WORK IS DONE WELL. When John comes over and asks for the

rest of the money, is Katherine obliged to pay the $2000 for labor? Why or why not?

What is the legal rule that determines this question?

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(B) Now we will go the other way. Katherine's son does NOT see or get involved

with the documents, so the question of the license's authenticity does not arise.

Katherine PAYS John the rest of the money. Three months later, after the first

heavy

snowfall, Katherine hears cracking noises in the upstairs

west wall,

and is

extremely upset to find that the roof has a pronounced sag right over one or the

new windows, with the result that the gutter no longer functions properly,

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shingles are not lying flat, and she can see right through the wall on one side of

that window.

She is

appalled. She calls her son, who finds a structural engineer who comes

and inspects and delivers a report:

when John was re-framing the window, he

cut through a structurally necessary upright to make room for the new window,

which was somewhat larger than the original one.

Windows the

exact size or the

original ones were no longer available

The consequence

is that the roof is now without some of its necessary support,

and an expensive repair job will now be necessary.

Katherine calls John, explains the situation, and asks him to pay for the repairs.

John refuses to do so.

and points to the second clause on the back of the Estimate:

"Customer agrees that Contractor shall not be liable for damages due to negligent or

grossly negligent performance of the work.

Questions arising:

(B)(1) What are the four required elements of any contract? List each one and

say whether that element was satisfied as of the date Katherine signed the

Estimate, and now.