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 and Baker Company did not receive any chemical C, they do not owe any money to Able Company or Mr. Long. The assignment to Mr. Long is therefore ineffective and he cannot claim the $1200 from Baker Company.

Able Company Contracted to Sell to Baker Company 400 Barrels