Read the Scenario: Kelly is a recent graduate from Le Cordon Bleu, and she decides to open
Question:
Read the Scenario:
Kelly is a recent graduate from Le Cordon Bleu, and she decides to open her own coffee house with her mother as a partner. She purchased an old coffee house. In order to improve the coffee house image and hopefully her business, she decides to give the coffee house ‘a lift’. Accordingly, she contacts GG, a decorator and interior designer. GG visits Kelly’s premises and after inspecting the interior, he tells to her that she would be better to do everything ‘in one go’. It is agreed that the coffee house will be painted and new furniture will be purchased. GG tells Kelly that he will take care of everything. Kelly replies: ‘Please do it right. This is important for my business. I don’t want second-rate workmanship. GG says: ‘You can rest assured this will never happen. I only choose the best of everything. Besides, I always guarantee my work’.
The parties subsequently enter into a written contract, which Kelly glances at briefly, and signs. The contract provides that the work is to be done for $ 100,000. Upon completion of the work, Kelly visits the coffee house for an inspection. To her horror, she notices that the paint, which is already beginning to peel, is obviously of inferior quality and that the low quality furniture covered with cheap cloth. She consults the contract which she signed and notices a clause which provides that no guarantee is given for the quality of any work undertaken. Kelly consults another interior decorator and is advised that it will cist a further $100,000 to re-paint and replace the furniture. To make the situation worse, her mother found out what had happened and demands her money back.
Kelly seeks your help. Advise Kelly as to the legal grounds which may be available to her and which may form the basis of an action against GG. Also advise what Kelly can do about her mother’s demands. Indicate Kelly the likelihood of success or otherwise with respect to each. Give detailed reasons for your advice.
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain