Harvey refused and brought an appropriate action against Day. Should Harvey recover? If so, on what basis and to what relief is he entitled?

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Harvey refused and brought an appropriate action against Day. Should Harvey recover? If so, on what basis and to what relief is he entitled?

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In October 2012, Black, the owner of the Grand Opera House, and Harvey entered into a written agreement leasing the Opera House to Harvey for five years at a rental of $300,000 per year. Harvey engaged Day as manager of the theater at a salary of $1,175 per week plus 10 percent of the profits. One of Day’s duties was to determine the amount of money taken in each night and, after deducting expenses, to divide the profits between Harvey and the manager of the particular attraction that was playing at the theater. In September 2017, Day went to Black and offered to rent the Opera House from Black at a rental of $375,000 per year, whereupon Black entered into a lease with Day for five years at this figure. When Harvey learned of and objected to this transaction, Day offered to assign the lease to him for $600,000 per year. Harvey refused and brought an appropriate action against Day. Should Harvey recover? If so, on what basis and to what relief is he entitled?

Explanation & AnswerSolution by a verified expert

Explanation

Individual D's contract with Individual B is proof of Individual D's disloyalty toward the principal, Individual H. Individual D, being the agent of Individual H ,was not supposed to enter into a contract that was against the interests of the business of Individual H but Individual D entered into a contract with Individual B, which directly affected Individual H's business negatively. So, the court is going to decide the case in favor of Individual H.

Verified Answer

Individual H is going to be favored by the court since Individual D ,the agent of Individual H, was not loyal to the principal and entered into a contract that was against the interests of Individual H, the principal.

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