Question

Matrix, Inc. is the general mortgage contractor of a large commercial building project. They subcontracted with Acme Flooring, Inc. to have flooring installed throughout the building. When Matrix failed to make payments to Acme as agreed, Acme stopped working. Commercial Bank, the lender for the project, orally promised Acme that Commercial would pay whatever Matrix failed to pay Acme if Acme would resume work. Acme finished the flooring but was still not paid. Which of the following is true under the Statute of Frauds?

Answer 1

Answer:

The options are missing in the question. But I believe the answer is ---

Commercial Bank's promise enhanced its mortgage interest, hence it should pay Acme        

Explanation:

                  The statute of frauds requires  certain types of contracts to be memorialized in writing and is signed by all the parties that are bound by the contract with sufficient content to evidence the contract.

                   Here, Matrix Inc. takes a mortgage loan from Commercial bank for constructing a building project. And they gave a subcontract to Acme Flooring Inc. to do the flooring.

                 But Matrix Inc. did not pay to Acme Flooring as promised and so Acme stopped their work. But the lender of the project, Commercial Bank asked Acme Flooring to continue to work and finish the work and promised orally to pay them.

                  Now as the Commercial bank promised to pay Acme, according to the Statute of Frauds, Commercial Bank is liable to pay Acme as they have mentioned in the contract to lend money for the mortgage loan and signed by all the parties in the contract. They are bound to pay as per the statute of frauds.

Hence the answer is ---

Commercial Bank's promise enhanced its mortgage interest, hence it should pay Acme.