Business Law- Paul Painter agreed to paint Harry Homeowner’s house for $5,000.
Paul Painter agreed to paint Harry Homeowner’s house for $5,000. Paul never planned to actually paint the house, but made a habit of entering into contracts, taking partial or complete payment in advance, and never doing the work. Paul got his friend, Beth, to talk to Harry about how competent and honest Paul was, and explain that Harry should not be concerned about the quality of work or paying Paul in advance. Harry wrote Paul a $3,000 check 1 week before the painting was to be started. Paul transferred the check to Allison in exchange for Allison’s car, which was worth $2,800. Before Allison had a chance to deposit the check, there were several news stories about Paul and all the fraud he had been committing. Allison then transferred the check to Beth, who then transferred it to Cathy. Beth gave Allison value for the check, and Cathy gave Beth value. Explain the applicability of the shelter principle in this situation. (IRAC REQUIRED)
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