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[Lease Payments] Wu Operated a Medical Transcription Business

Question 71

Multiple Choice

[Lease Payments] Wu operated a medical transcription business. Planning to open a second office, she rented office space from Matt. Unfortunately, her business didn't do as well as she'd expected, and she decided against opening a second office after she signed the lease. Wu was able to reach an agreement with DeAndre whereby she transferred her entire interest in the leased property to him. The agreement she had with Matt prohibited her from transferring her interest. Matt, however, accepted rent payments from DeAndre because it was the easiest course of action. DeAndre started a catering business in the space. It did well during the holiday season, but DeAndre was unable to maintain bookings and became unable to pay the rent in the spring. Matt called Wu and asked her to pay the rental payments, reminding her that she breached the lease agreement in the first place when she transferred her interest in the lease to DeAndre. Wu told Matt to forget any payments from her and hung up. Matt wants to sue Wu for the lease payments and also for breaching the lease agreement, and he also wants to sue DeAndre. Wu talks to DeAndre, who says that he also has no plans to pay Matt. DeAndre also says that he does not believe he has any liability to Wu if she pays Matt. DeAndre says that the premises were acceptable but he wants out of the catering business.
-If Wu pays Matt, does she have any rights to receive reimbursement from DeAndre?


A) No, because she has no legal liability and is acting as a volunteer.
B) No, because only Wu is liable on the assignment.
C) Yes, but she would only be entitled to recover one half of the amounts because she and DeAndre are jointly liable to Matt.
D) Only if DeAndre specifically agreed by contract when he accepted the premises to reimburse her.
E) Yes, Wu would have a right of reimbursement from DeAndre.

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