Question

On May 1, Peters, a concert producer, executed two contracts. The first contract was with Selena, a world-renowned singer, which provided that Selena was to perform a concert at Thomas’s theater in Manhattan on July 4 for a fee of $200.000. The second contract was with Thomas, the owner of a theater in Manhattan, under which Peters rented Thomas’s theater in Manhattan for the July 4 concert for a rental fee of $20,000. Peters sold out in advance all of the tickets for the concert and would have made a net profit on the concert of $100,000, after deducting the rental cost of the theater, Selena’s fee and $20,000 for advertising expenses. On July 2, Thomas’ theater burned down due to lightning. Peters immediately notified Selena, canceled the July 4 concert and refunded the full purchase price of the tickets to those who had bought tickets. Selena insisted upon payment of her fee because she was ready, willing and able to perform and the fire was not her fault.

(a) In an action by Selena against Peters to recover her fee, judgment for whom? Explain.

(b) In an action by Peters against Thomas to recover Peters actual expenses or $20,000 for advertising the concert and his lost profits of $100,000, judgment for whom? Explain.

Answer 1