For example, the deal is that BrokerSneaky mails a payment to Seller. Seller has placed something in escrow as required by BrokerSneaky. BrokerSneaky DOES NOT mail anything, but instead gets HaplessBuyer to mail the payment by giving HaplessBuyer some reason to send the same amount of money that Seller charged BrokerSneaky. Seller receives the payment from HaplessBuyer and instructs escrow to release its holdings to BrokerSneaky. BrokerSneaky disappears without giving anything to HaplessBuyer (who wasn't smart enough to demand an escrow).

What legal claims, if any, does HaplessBuyer have against Seller?


What legal claims, if any, does HaplessBuyer have against Seller?

None. Seller entered a contract with BrokerSneaky, not with HaplessBuyer. HaplessBuyer only has viable claims against BrokerSneaky.

For certain types of goods, services, or contracts, the case might be made that Seller had a duty to ensure that HaplessBuyer --not BrokerSneaky-- is the beneficiary in the contract, but that is not palpable in the situation you describe. Nor does your description reflect that Seller knew of BrokerSneaky's intention to defraud HaplessBuyer.

  • Do you have any references for this answer that can be used by Seller if Seller is contacted by HaplessBuyer's attorneys? I once had a case like this, and I explained what you just wrote (it just seems and seemed right), and that ended it, but I've since learned that some lawyers need more hand-holding to give up on a useless claim. – Dave Scotese Dec 20 '18 at 0:57
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    It is unlikely that Seller is BrokerSneaky's agent. The legal definition of contract says it binds only the parties (and their agents) who made the agreement. This applies in the U.S. and many other countries, and every lawyer is expected to know this tenet of the doctrine of contract law. Thus, lawyers playing dumb here might be (1) probing into Seller's words/records to screw him from another angle; (2) pursuing unwarranted concessions from Seller through intimidation and/or vexation; or (3) plain incompetent. – Iñaki Viggers Dec 20 '18 at 11:28

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