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Bobby Brush agreed to paint Harry Resident’s house for $5,000. Bobby
never planned to actually paint the house, but made a habit of entering
into contracts, taking partial or complete payment in advance, and never
doing the work. Bobby got his friend, Beth, to talk to Harry about how
competent and honest Bobby was, and explain that Harry should not be
concerned about the quality of work or paying Bobby in advance. Harry
wrote Bobby a $3,000 check one week before the painting was to be
started. Bobby transferred the check to Allison in exchange for
Allison’s car, which was worth $2,800. Before Allison had a chance to
deposit the check, there were several news stories about Bobby and all
the fraud he had been committing. Allison then transferred the check to
Beth, who then transferred it to Cathy. Beth gave Allison value for the
check, and Cathy gave Beth value. Explain the applicability of the
shelter principle in this situation.
