Cengage Advantage Books: Business Law 9th Edition by Arnold Goldman ,William Sigismond

Exercise 5

Morrow offered to sell his clothing store to Now. The assets consisted of the building, merchandise, office equipment, and the rights under contracts with certain wholesalers to purchase new inventory at an agreed price. In consideration for receipt of the aforementioned assets, Now was to pay $500,000 up front and assume all business liabilities owed by Morrow. Now accepted the offer, and a written contract was signed by both parties.
Questions
1. Under this contract, what legal arrangements occurred between the parties?
2. To validate these legal arrangements must Morrow's creditors and the parties who had agreed to deliver goods to Morrow agree to the sale of the business?
3. Under this agreement between Morrow and Now, would Morrow be freed up from all liability to his creditors once the purchase was consummated?