Dunlop sold tires to Mew.The parties' contract prohibited Mew from reselling the tires unless its sub-buyer agreed to abide by Dunlop's list price for the tires.Mew resold the tires to Selfridge.Under its contract with Mew, Selfridge agreed to (1) abide by Dunlop's list price, and (2) pay $50 to Dunlop for each tire that it sold in violation of that list price.Selfridge resold 10 of the tires to its own customers for less than Dunlop's list price.Which of the following statements is most likely to be TRUE?
A) Selfridge is required to pay $500 to Dunlop only if Selfridge's contract with Mew is under seal.
B) Selfridge is required to pay $500 to Mew.
C) Selfridge is required to pay $500 to Dunlop.
D) As a result of the contract between Mew and Selfridge, privity of contract exists between Dunlop and Selfridge.
E) Dunlop is not entitled to any payment from Selfridge because Dunlop was not privy to the agreement between Selfridge and Mew.
Correct Answer:
Verified
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