Abby and Paula entered into a valid contract under which Abby agreed to buy and Paula agreed to sell for $1.5 million a printing press for Abbys business. In the contract, Paula warranted that the press was in working order. Abby made a $500,000 payment to Paula at the time of the sale and agreed to make the final payment of $1 million in six months. Just prior to the date the final payment was due, Abby sold her business, including the press, to Bert. As part of the sale, Bert agreed with Abby to pay Paula the $1 million due her. Abby represented in the purchase agreement between Abby and Bert that all the business equipment was in working order, although she knew that the press never functioned as it was intended to. In fact, Abby had previously requested of Paula that she repair or replace the press, but Paula had refused to do so.

After Bert bought the business he discovered the problem with the press. He told Paula that he would not pay her the $1 million due until she repaired or replaced the press. Paula immediately filed a breach of contract lawsuit against Bert for the outstanding $1 million balance. Bert denies any obligation to pay Paula the $1 million on the basis that he had never entered into any contract with Paula.

In the lawsuit between Bert and Paula, who will win and why? You must do an IRAC analysis of all of the legal issues. (20 points) Pay attention to who is suing whom. You should draw an outline of what is going on here. Be sure to pick the correct legal issue.