Business Law and the Regulation of Business 11th Edition by Richard Mann, Barry Roberts

Exercise 25

Johnson, who owns a hardware store, was indebted to Hutchinson, one of his suppliers. Johnson sold his business to Lockhart, one of Johnson's previous competitors. Lockhart combined the inventory from Johnson's store with his own and moved the combined inventory to a new, larger store. Hutchinson claims that Lockhart must pay Johnson's debt because the sale of the business had been made without complying with the requirements of the bulk sales law. Discuss whether Lockhart is obligated to pay Hutchinson's debt to Johnson.