Bus 415 Week 2 Question

Discussion Question 3: Paulette is the owner of the Rock On Mobile Home Park. For several years, Albert regularly collected rent for Paulette from the tenants of the mobile home park. Recently, Paulette learned that Albert pocketed some rent he collected, so Paulette fired Albert, and revoked his authority to collect rent payments from tenants. However, neither Paulette nor Albert told any tenants of Albert's termination. Yesterday, Albert went around to Theresa’s mobile home and asked for the rent. Theresa paid Albert the money owed to Paulette. Albert never gave this money to Paulette. Is Theresa liable to pay Paulette? Why or why not? What legal principle did you apply? Discuss an agent’s obligations toward his principal.

ANSWER:

I find that Theresa is not liable since neither Paulette nor Albert informed Theresa regarding the change in recipient of the rent money. Theresa, indeed, proceeded with her customary action with regards to payment of rent to Albert. On the other hand, had Theresa been informed of the changes to the contract and she had continued to pay Albert, she could have been held liable. In cases such as this, it is paramount that all concerned parties are aware of changes to contracts. This is true whether the situation regards a verbal or written contract. The prior understanding was such that Theresa pay Albert every month the rent, and Paulette was aware of this. If matters had proceeded appropriately, Paulette would have given notice to Theresa about the change. In this way, Theresa would then have held liability for paying Albert and not her. It would have also be necessary to inform Albert, so that if he stole the rent money he would be responsible for criminal or civil charges.

Paulette should be payed the money by Albert as he is liable. Albert can be taken to small claims court by Paulette since he has violated the previous agreement. In the future Paulette should be sure that all parties are aware of the agreements to avoid a...