Cengage Advantage Books: Law for Business 18th Edition by John Ashcroft ,Janet Ashcroft

Exercise 18

James Spolyar was a general partner of Plantation Oaks, a limited partnership. Spolyar met with Jerry Lutz and told him Plantation needed to sell one to three partnership units to purchase an apartment complex. He promised to buy back any units Lutz purchased. Four days later, Lutz received documents including a note that recited that it constituted part of Lutz's purchase price of units in Plantation. Lutz signed the note, which stated a promise to pay and listed a schedule of payments totaling $69,308. Lutz returned the note to Spolyar, who indorsed it to European American Bank in return for a loan and a guarantee from Northwestern National Insurance Co. However, after the promise to pay $69,308 someone had handwritten a caret (^) and the words "per unit" and below the payment schedule "$69,308 × 3 units = $207,924." Lutz did not pay the note. Northwestern paid European the amount for three units and then sued Lutz. How much, if anything, must Lutz pay? [Northwestern Nat. Ins. Co. of Milwaukee v. Lutz, 71 F. 3d 671 (7th Cir.)]