Roy and Carlos contracted to deliver a boat; after a fortuitous event the contract provides that fortuitous event shall not exempt performance, and the liability is converted to indemnity for damages. What is the nature of their liability?

Study for the Supernova Regulatory Framework for Business Transactions Test. Use flashcards and multiple choice questions. Each question has hints and explanations. Get prepared for your exam!

Multiple Choice

Roy and Carlos contracted to deliver a boat; after a fortuitous event the contract provides that fortuitous event shall not exempt performance, and the liability is converted to indemnity for damages. What is the nature of their liability?

Explanation:
The key idea is how liability changes when multiple debtors are involved and the obligation shifts from performing a delivery to indemnifying damages. When several people are obliged to deliver something or perform, solidarity can exist if the law or the contract says so. But if the obligation becomes one of indemnifying damages for non-performance, the liability is typically divisible and shared among the debtors unless there is an express provision of solidarity. Here, after the fortuitous event, the contract converts the obligation from delivering the boat to indemnifying damages for the non-delivery. That makes the obligation a monetary, divisible claim for damages rather than an indivisible obligation to deliver a specific boat. Without an express solidarity clause, the default is joint liability among the co-debtors. So Roy and Carlos are jointly liable for the damages—each is responsible for a portion of the indemnity, and the injured party can sue either one for the full amount, with recovery from the other possible if one pays more than his share.

The key idea is how liability changes when multiple debtors are involved and the obligation shifts from performing a delivery to indemnifying damages. When several people are obliged to deliver something or perform, solidarity can exist if the law or the contract says so. But if the obligation becomes one of indemnifying damages for non-performance, the liability is typically divisible and shared among the debtors unless there is an express provision of solidarity.

Here, after the fortuitous event, the contract converts the obligation from delivering the boat to indemnifying damages for the non-delivery. That makes the obligation a monetary, divisible claim for damages rather than an indivisible obligation to deliver a specific boat. Without an express solidarity clause, the default is joint liability among the co-debtors. So Roy and Carlos are jointly liable for the damages—each is responsible for a portion of the indemnity, and the injured party can sue either one for the full amount, with recovery from the other possible if one pays more than his share.

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