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15. Assuming that the window company has no remedy quasi in rem under the relevant state mechanic's lien statute, which of the following would provide the window company's best chance of an effective remedy in personam against the landlord?
60 days after the window company's satisfactory completion of the window replacement, and prior to the expiration of the tenant's lease, the tenant, then insolvent, ceased doing business and vacated the building. In so doing, the tenant forfeited under the lease provisions its right to the return of a $2,000 security deposit with the landlord. The deposit had been required, however, for the express purpose (as stated in the lease) of covering any damage to the leased property except ordinary wear and tear. The only such damage occurring during the tenant's occupancy was the smashed window. The window company's $2,000 bill for the window replacement is wholly unpaid.
A tenant rented a commercial building from a landlord, and operated a business in it. The building's large front window was smashed by vandals six months before expiration of the tenant-landlord lease. The tenant, who was obligated thereunder to effect and pay for repairs in such cases, promptly contracted with a window company to replace the window for $2,000, due 30 days after satisfactory completion of work. The landlord was then unaware of the tenant-window company contract. The window company was aware that the building was under lease, but dealt entirely with the tenant.
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A is correct. Where the window company has conferred a benefit (replaced the glass in the window) pursuant to its contract with the tenant, it normally would not be able to recover in restitution from the landlord. However, sometimes recovery in restitution is possible, especially where the third person (the landlord) has not already paid someone else for the work and the claimant's (the window company's) avenues to bring suit to enforce the contract have been exhausted. These and other factors suggest that restitution against the landlord would be just in this case: the tenant is insolvent, the landlord collected on a $2,000 deposit that the tenant forfeited because he broke the lease agreement, and the fact that the lease expressly contemplated the tenant fixing any damage to the property suggests that the landlord would have requested the work if given the opportunity.
Here, there is no contact between the window company and the landlord. There can be no promise, contract, or any other legally enforceable agreement or promise between the parties because the landlord and the window company never negotiated anything. Therefore, through a quick process of elimination, you can be confident that A is the correct answer.
B is incorrect. Promissory estoppel occurs when one party makes a gratuitous promise to another, and the non-promising party changes-position or acts (or does not act) in reliance upon that promise. Here, the landlord and the window company never had contact and the facts don't indicate that the window company knew about the security deposit. There simply was no promise.
C is incorrect. A contract that is implied in fact is signified by the conduct of the parties that rise to the level of mutual consent, or a meeting of the minds. Here, the minds could not have met, implied or explicitly, because the parties did not have contact prior to the window company seeking payment from the building owner.
D is incorrect. A third-party beneficiary must have been the intended beneficiary of a contract at the time it was formed. Here, nothing in the facts indicate that either party intended to benefit the window company, so a theory of third-party beneficiary cannot work.