QUESTION
Legalitof responsibility for a debt incurred by a second party
Asked on Feb 25th, 2013 on Consumer Law - Nevada
More details to this question:
Can a second party recipient of goods or services be legally held finiancially responsible for the cost of these goods or services, if the first party defaults or fails to pay the provider of these good or services? The situations is this; hotel rooms were booked by the first party in advance for a conference; and then later used by a second party (the attendees). The first party defaulted on paying for the room after use, and the second party (the attendees) were retroactively billed by the hotel for the cost of the room rentals. Is this second party legally responsible for paying this retroactive rental fee as the recipient of the service provided by the hotel, though they had no involvement in the original agreement between the first party and the hotel?
1 ANSWER
R. Christopher Reade
The answer at law is most likely no; however the answer in equity is yes. At law, there is a contract between Hotel and Person A. Person B is not a party to the contract and can generally not be held liable under the contract. The exception in law is if the Hotel asserts that Person B ratified, affirmed and assumed the contract for the rooms by its words and actions. This is a much weaker case than the case against Party A who is on the contract.
Even though the law enforces a contract as written, equity abhors people receiving and retaining a benefit for which they should not be able to retain in good conscience. “The doctrine of unjust enrichment or recovery in quasi contract applies to situations where there is no legal contract but where the person sought to be charged is in possession of money or property which in good conscience and justice he should not retain but should deliver to another [or should pay for].” Lipshie v. Tracy Investment Co., 93 Nev. 370, 379, 566 P.2d 819, 824 (1977).
Answered on Feb 26th, 2013 at 8:56 PM