The Weyburn Farmers' Co-op contracted to sell a carload of grain to Mr. Takemori for $2,000. The co-op assigned, in writing, its contractual right to receive the $2,000 to the Royal Bank, to which it was indebted. The Royal Bank gave written notice of the assignment to Takemori. Unknown to the buyer and the seller, at the time of the contract the grain had been destroyed because of a train derailment caused by the negligence of the train conductor. On these facts, which of the following is true?
A) The Royal Bank will receive part payment from Takemori.
B) The Royal Bank will receive $2,000 from Takemori because there was an assignment in writing and that is the sole test for determining if the assignee will be paid the amount of the assignment.
C) The Royal Bank, the assignee, will receive the $2,000 because it could prove privity of contract with Takemori.
D) Because of the conductor's negligence, the railroad will have to honour Mr. Takemori's contract with the Royal Bank.
E) The Royal Bank will receive nothing from Takemori, because Takemori owes nothing to the Co-op.

Question

Quizplus · Accepted Answer

Takemori owes nothing to the Co-op as the grain was destroyed due to unforeseen circumstances, and the contract has become impossible to fulfill. The Royal Bank's assignment of the contractual right to receive $2,000 does not change this fact. Therefore, the Royal Bank will not receive anything from Takemori.

The Weyburn Farmers' Co-Op Contracted to Sell a Carload of Grain