Deirdre read that bids were being solicited for the construction of an apartment tower. Deirdre submitted the lowest bid and was offered the contract contingent on her providing acceptable sureties in the amount of $1 million. Because Deirdre never had
done work on this scale, it was virtually impossible for her to obtain the appropriate sureties. She convinced Reassuring Sureties, Inc to issue the necessary commitment by misrepresenting that she was a famous builder in Canada. As the work progressed, it seemed to be going well and Deirdre was asked to make the project 52 stories instead of 50 stories, which was the original contract height. She agreed to this change. After the work was completed, many breaches of contract on the part of Deirdre became evident. Reassuring Sureties was sued for a $500,000 loss. Reassuring Sureties defended on the grounds of fraud and material change in the contract. Decide.
Fraud will not be an effective defense because the creditor did not know of, or participate in, the fraud. Material alteration of the contract (52 stories instead of 50 ) without the surety's permission is an effective defense.
You might also like to view...
An ad agency has landed an account for Savola, a brand of healthy cooking oil. Describe how the ad can incorporate negative appeals in its messages effectively
What will be an ideal response?
Cash equivalents do not include
a. U.S. Treasury bills. b. money market accounts. c. marketable securities. d. commercial paper.
One example of people skills is the ability to motivate others to meet goals.
Answer the following statement true (T) or false (F)
According to Melnyk, et al. 2010, supply chains of tomorrow must deliver varying degrees of
A) safety and security of goods delivered. B) eliminating waste, reducing pollution, and improving the environment. C) innovation. D) all of the above.