Business Law Today, Comprehensive 10th Edition by Roger LeRoy Miller

Exercise 13

A Question of Ethics-Assignment and Delegation. Premier Building Development, Inc., entered a listing agreement giving Sunset Gold Realty, LLC, the exclusive right to find a tenant for some commercial property. The terms of the listing agreement stated that it was binding on both parties and "their... assigns." Premier Building did not own the property at the time, but had an option to purchase it. To secure financing for the project, Premier Building established a new company called Cobblestone Associates. Premier Building then bought the property and conveyed it to Cobblestone the same day. Meanwhile, Sunset Gold found a tenant for the property, and Cobblestone became the landlord. Cobblestone acknowledged its obligation to pay Sunset Gold for finding a tenant, but it later refused to pay Sunset Gold's commission. Sunset Gold then sued Premier Building and Cobblestone for breach of the listing agreement.
1. Is Premier Building relieved of its contractual duties if it assigned the contract to Cobblestone Why or why not
2. Given that Sunset Gold performed its obligations under the listing agreement, did Cobblestone behave unethically in refusing to pay Sunset Gold's commission Why or why not