On May 1, Ann and Boyd entered into an oral agreement to open a dance studio...

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On May 1, Ann and Boyd entered into an oral agreement to open a dance studio called Knockers. Knockers leased space from Drake, agreeing to pay Drake 15% of the gross fees Knockers collected from its students for the right to use the leased space. Drake had no involvement in the management or operation of Knockers. The lease required a deposit of $500 which Ann paid. Ann and Boyd both taught classes, and Boyd handled the bookkeeping. They agreed to split the profits equally. On May 15, Ann signed a contract with a sign fabricator to make a store-front sign for Knockers. The contract required Knockers to pay $4,000 for the design and fabrication of the sign and a monthly fee of $200 for a pole on which to display the sign. Unbeknownst to Ann, on June 1, Boyd started giving some of the more competitive dancers private classes in his basement, keeping the money he earned from those classes. He told the students Knockers was using his basement as an annex. On July 1, a student tripped on loose carpeting in Boyd's basement and was injured. Business was booming at Knockers, so on July 15, Ann and Boyd hired another dance instructor, Maureen. Soon thereafter, they sold Maureen a 10% ownership interest in Knockers for $10,000 and deposited the money in Knockers' business account. Maureen agreed to share equally in the profits of Knockers. On September 1, Ann and Maureen discovered Boyd's side business when the injured student sued Ann, Boyd, Maureen, Knockers and Drake. They also discovered that Boyd had failed to pay the sign fabricator. QUESTIONS: Discuss: 1. the nature of the relationships between Ann, Boyd, Maureen, and Drake; 2. which of the defendants can be held liable for the student's injuries and the debt to the sign fabricator; 3. the extent of each party's liability (if any); and, 4. what claims Ann and Maureen can assert against Boyd. On May 1, Ann and Boyd entered into an oral agreement to open a dance studio called Knockers. Knockers leased space from Drake, agreeing to pay Drake 15% of the gross fees Knockers collected from its students for the right to use the leased space. Drake had no involvement in the management or operation of Knockers. The lease required a deposit of $500 which Ann paid. Ann and Boyd both taught classes, and Boyd handled the bookkeeping. They agreed to split the profits equally. On May 15, Ann signed a contract with a sign fabricator to make a store-front sign for Knockers. The contract required Knockers to pay $4,000 for the design and fabrication of the sign and a monthly fee of $200 for a pole on which to display the sign. Unbeknownst to Ann, on June 1, Boyd started giving some of the more competitive dancers private classes in his basement, keeping the money he earned from those classes. He told the students Knockers was using his basement as an annex. On July 1, a student tripped on loose carpeting in Boyd's basement and was injured. Business was booming at Knockers, so on July 15, Ann and Boyd hired another dance instructor, Maureen. Soon thereafter, they sold Maureen a 10% ownership interest in Knockers for $10,000 and deposited the money in Knockers' business account. Maureen agreed to share equally in the profits of Knockers. On September 1, Ann and Maureen discovered Boyd's side business when the injured student sued Ann, Boyd, Maureen, Knockers and Drake. They also discovered that Boyd had failed to pay the sign fabricator. QUESTIONS: Discuss: 1. the nature of the relationships between Ann, Boyd, Maureen, and Drake; 2. which of the defendants can be held liable for the student's injuries and the debt to the sign fabricator; 3. the extent of each party's liability (if any); and, 4. what claims Ann and Maureen can assert against Boyd.

Answer rating: 100% (QA)

1 Nature of the relationships Ann and Boyd are coowners of Knockers and have a partnership agreement ... View the full answer