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 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) Even though it promised Mew to pay $50 to Dunlop for each tire sold in violation of the list price,and even though it sold ten tires at less than the list price,Selfridge is not liable to Dunlop as Dunlop is not privy to the contract with Selfridge.
Correct Answer:
Verified
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