In a bailment, possession of the property is transferred to the bailee.
The UCC requires that the mirror image rule be followed for all acceptances.
Andy leases to Burgertown Franchise Corporation a 10,000 square-foot building under
a written lease with a twenty-year term, rent payable annually. The lease includes a
clause stating that Burgertown is responsible for making all necessary repairs, including
rebuilding the structure after its destruction by any cause beyond Andy’s control. The
lease does not include a clause concerning its assignment. One day after the tenth rental
payment, Burgertown, without Andy’s knowledge or consent, assigns its interest in the
lease to Chicken Hut Restaurants, Inc. Meanwhile, Andy dies and Dotty inherits Andy’s
interest in the building. Without the knowledge or consent of either Burgertown or
Chicken Hut, Dotty sells the building to Earnest Investments, Inc. The next month, the
building is destroyed in the flood of a nearby river. Burgertown rebuilds it and files a
suit against Earnest for the expense. Earnest responds that the lease has terminated. Is
Earnest correct? If so, when did the lease terminate? If not, is Earnest liable for the cost
of rebuilding the structure? Why or why not?