Cengage Advantage Books: Fundamentals of Business Law Today 10th Edition by Roger LeRoy Miller

تمرين 6

FACTS Tammy Herring and Stacy Bowman signed an agreement titled "Bill of Sale-Purchase Agreement" involving a horse named Toby. The agreement defined Herring as the "buyer" and Stacy and Gregory Bowman, who owned Summit Stables in Puyallup, Washington, as the "seller." It required Herring to make monthly payments until she paid $2,200 in total for Toby. Additionally, Herring agreed to pay Toby's monthly boarding fee at Summit Stables until the purchase price balance was paid and to cover other incidental costs, such as veterinary expenses. The Bowmans were to provide Toby's registration papers to Herring only when she had paid in full.
One day, another stable boarder, Diana Person, was injured when she was thrown from a buggy drawn by Toby and driven by Herring's daughter, Alex. Person and her husband, Robert, filed a suit in a Washington state court against the Bowmans to recover for her injuries. The court ruled in the defendants' favor, and the Persons appealed.
ISSUE For purposes of the passage of risk, did Herring own the horse?
DECISION Yes. A state intermediate appellate court affirmed the judgment in the Bowmans' favor. Herring (not the Bow- mans) owned Toby at the time of the accident that resulted in Person's injuries.
REASON The state of Washington "follows the objective manifestation theory of contract interpretation, under which courts try to ascertain the parties' intent by focusing on the objective manifestations of the agreement, rather than on the unexpressed subjective intent of the parties." The contract clearly showed that Herring owned Toby.
Herring asserted that she believed she would not own Toby until she had paid the full contract price, but that belief did not negate her ownership rights in the horse. No statements actually demonstrated that the parties intended to lease Toby. "Each statement acknowledged that the Bowmans retained a security interest in Toby." Herring's subjective belief may have been that she did not own Toby and that this was a lease-like agreement, but "the parties' objective manifestations are consistent with this being a sale, not a lease."
WHAT IF THE FACTS WERE DIFFERENT? If the agreement between Herring and the Bowmans had been a lease, would the result have been the same ? Explain.