BUS311_chapter_06

If a release had been obtained from the rosenbergs

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Unformatted text preview: that would apply, noting it is a wellestablished principle in the law of contracts that a contracting party cannot escape its liability on the contract by merely assigning its duties and rights under the contract to a third party. If a release had been obtained from the Rosenbergs, Pratt would not be liable, but express language is needed to effect this waiver. While the Rosenbergs did consent to Pratt’s assignment and delegation of the contract, at no time did they agree that Pratt herself would no longer be held responsible on the contract. Holding: Pratt was held liable on the contract. Neither an assignment nor delegation relieves the original contracting party of liability. Questions for Discussion 1. Draw a diagram of the original contract and subsequent assignment. Who is the assignor? The assignee? The obligor? 2. Could Pratt have likely assigned the contract and delegated the duties without the Rosenbergs’ consent? Why or why not? 3. Why is it considered fair to hold Pratt liable on the contract, even though she has no current association with the Dairy Queen? 4. Why do you suppose the Rosenbergs went after Pratt and Son Inc., rather than Merit? rog80328_06_c06_111-133.indd 129 10/26/12 5:37 PM Section 6.4 Chapter Summary CHAPTER 6 Case Study: Campbell Soup Co. v. Wentz 172 F.2d 80 (3rd Cir. 1949) Facts: Per a written contract between Campbell Soup Company (a New Jersey company) and the Wentzes (carrot farmers in Pennsylvania), the Wentzes would deliver to Campbell all the Chantenay red cored carrots to be grown on the Wentz farm during the 1947 season. The contract price for the carrots was $30 per ton. The contract between Campbell Soup and all sellers of carrots was drafted by Campbell and it had a provision that prohibited farmers/sellers from selling their carrots to anyone else, except those carrots that were rejected by Campbell. The contract also had a liquidated damages provision of $50 per ton if the seller breached, but it had no similar provision in the event Campbell breached. The contract not only allowed Campbell to reject nonconforming carrots, but gave Campbell the right to determine who could buy the carrots it had rejected. The Wentzes harvested 100 tons of carrots, b...
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