Able Company contracted to sell to Baker Company 400 barrels of chemical C for $1200.Able Company assigned the entire $1200 in writing to Mr.Long,who sent a letter informing Baker Company of the assignment and directing Baker Company to forward money to him instead of Able Company.Unbeknown to both companies,at the time of the contract,the ship carrying the chemical had sunk and all cargo was lost.Which of the following is true?

Question

Quizplus · Accepted Answer

Since the cargo was lost, nothing is owed to Able Company and therefore there is nothing for Mr. Long to receive through the assignment. The assignment would have been valid if the cargo had not been lost, but since it was lost, the assignment is irrelevant.

Able Company Contracted to Sell to Baker Company 400 Barrels