Question: Martin Stern Jr was an architect who worked in Nevada

Martin Stern Jr. was an architect who worked in Nevada. Nathan Jacobson asked Stern to draw plans for Jacobson’s new hotel/ casino, the Kings Castle at Lake Tahoe. Stern agreed to take on the project and immediately began preliminary work. At this time, Stern dealt directly with Jacobson, who referred to the project as “my hotel.” One month later, Stern wrote to Jacobson, detailing, among other things, the architect’s services and fee. The two men subsequently discussed Stern’s plans and set Stern’s fee at $ 250,000. Three months later, Jacobson formed Lake Enterprises, Inc. (Lake Enterprises), a Nevada corporation of which Jacobson was the sole shareholder and president. Lake Enterprises was formed for the purpose of owning the new casino. During this period, Stern was paid monthly by checks drawn on an account belonging to another corporation controlled by Jacobson. Stern never agreed to contract with any of these corporations and always dealt exclusively with Jacobson. When Stern was not paid the full amount of his architectural fee, he sued Jacobson to recover. Jacobson claimed that he was not personally liable for any of Stern’s fee because a novation had taken place. Who wins? Jacobson v. Stern, 605 P. 2d 198, 1980 Nev. Lexis 522 (Supreme Court of Nevada)

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  • CreatedAugust 12, 2015
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