Cengage Advantage Books: Business Law 9th Edition by Arnold Goldman ,William Sigismond

Exercise 14

Basic Construction Co. signed a contract to build some buildings for the State University of New York. Basic hired Stone as supervising architect. One of Stone's duties was to personally arbitrate disputes that might arise between Basic Construction Company and the state of New York. A subcontractor sued both Basic and Stone on a dispute that had been arbitrated by someone other than Stone. Stone claimed that he could not be held liable because the decision had been made by a person to whom Stone had delegated his duties as arbitrator. Is Stone liable? (John W. Johnson, Inc. v. Basic Construction Co., 292 F.Supp.300)