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[Lease Payments] Wu Operated a Medical Transcription Business

Question 48

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.
-Which statement is true regarding the right of Matt to collect rent payments from Wu?


A) Wu owes no duty to pay any rent to Matt because she validly transferred her rights and obligations under the lease.
B) Wu only owes a duty to pay Matt if DeAndre has been declared bankrupt by the bankruptcy court.
C) Wu only owes a duty to pay Matt if she agreed with DeAndre that she would do so if he became unable to pay.
D) Wu only owes a duty to pay Matt only if DeAndre committed waste on the property.
E) Wu owes a duty to pay Matt.

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