Question

Owner A hires someone to burn down his building for the insurance money. They agree on all the terms including payment. The contract would be_________

Answer 1

The contract between Owner A and the person hired to commit arson would be illegal and unenforceable, violating property rights and public policy.

Step-by-step explanation:

The contract between Owner A and the individual hired to burn down the building for insurance money would be considered illegal and unenforceable. This is because the contract is for an illegal act, which violates public policy and is considered a criminal offense. The subject of property rights, as discussed by Coase, emphasizes that legal rights of ownership should not be infringed upon without paying compensation. In this case, the contract would breach these property rights and would be void from the outset, leaving both parties without legal grounds to enforce any terms agreed upon.