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

Exercise 10

The Paddocks hired Harper Realty to sell their hotel. The Paddocks agreed that if Harper sold the hotel, they would pay Harper a commission of $15,000, with $3,000 down and the balance in monthly installments. The Paddocks gave Harper a note for the $12,000. Harper negotiated the note to McLean, an HIDC. When the payments were not made, McLean sued the Paddocks. The Paddocks' defense was that they were induced to sign the note because of a false representation by Harper that the note was required, when, in fact, it was not. Is this defense valid against the claim? (McLean v. Paddock, N.M. 430 P.2d 392)