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Unformatted text preview: 125 C HAPTER 16 T HIRD P ARTY R IGHTS A NSWER TO Q UESTIONS AT THE E NDS OF THE C ASES CASE 16.1(PAGE 324) WHAT IF THE FACTS WERE DIFFERENT? Suppose that Graham had not benefited from the Centers assumption of the duties associated with her choreography. Would the alleged assignment have been valid ? Why or why not? Probably not, assuming that there would have been no other consideration shown for the assignment. As the court explains, consideration is a requirement for a valid assignment, just as it is an element of any valid contract. THE E-COMMERCE DIMENSION If Grahams dances had existed as part of a database available only over the Internet, would the principles applied in this case, and how they were ap- plied, have been different? Why or why not? No. The legal principles that the court appliedrelating to consideration, assignments, copyright, and evidencelikely would have been the same, in the context of material available only over the Internet. And their application would most likely echo the conclusion of the court in the actual case. CASE 16.2QUESTIONS (PAGE 330) 1A. For what reasons did the state intermediate appellate court uphold the lower courts summary judgment? The appellate court reasoned, The plain reading of the construction contract indicates that Action Steel intended to benefit Varco- Pruden. The contract provides for the acquisition of property insurance after project completion and indicates that the insurance shall include the interest of ... subcon- tractors. Furthermore, the contract provides that if Action Steel acquired insurance af- ter project completion, it shall ... waive all rights against ... any of [the parties] sub- contractors. Thus, when Action Steel purchased property insurance after the project was completed, it intended that subcontractors, such as Varco-Pruden, would benefit from the waiver ... clause. The court also concluded that the performance of these clauses in the contract rendered a direct benefit to Varco-Pruden. 2A. If the collapse of the building had been due to the negligence of a sub- contractor, how might that party argue successfully against recovery? In regard to this issue in the Midwestern case, the appellate court noted that [t]he plain language 126 UNIT THREE: CONTRACTS AND E-CONTRACTS of the construction contract indicates that the insurance coverage and waiver of ... rights pertain to damage caused by perils insured against such as fire and collapse. It is the relationship between the damage and the perils insured against that controls the waiver .... Here, it is the collapse of the building addition that is insured against by the Midwestern policy. Waiver does not depend on what theory, contract, warranty, or negligence, might be asserted to seek recovery for the damages caused by the collapse....
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