Tim contracts with Home Dairy to deliver a bottle of milk to Tim's house every day.Home Dairy assigns Tim's contract to Mother Dairy.Tim is notified of the change and continues to get his daily bottle of milk.His contract is now with Mother Dairy.In this instance,Mother Dairy is the:
A)assignee.
B)beneficiary.
C)holder in due course.
D)assignor.

Question

Tim contracts with Home Dairy to deliver a bottle of milk to Tim's house every day.Home Dairy assigns Tim's contract to Mother Dairy.Tim is notified of the change and continues to get his daily bottle of milk.His contract is now with Mother Dairy.In this instance,Mother Dairy is the:
A)assignee.
B)beneficiary.
C)holder in due course.
D)assignor.

Quizplus · Accepted Answer

As an example,Browning Construction Co.agrees to build an in-ground swimming pool pursuant to plans provided by Geraldo Garcia.At the time the contract is signed by the two parties on March 1,Garcia makes a down payment of $5,000 and agrees to pay the balance of $20,000 when Browning completes the pool.If on April 1,Browning assigns its rights under the contract to First Bank,then First Bank will obtain whatever rights Browning has at the time First Bank seeks to collect the balance due on the contract.The assignee (First Bank)may not be aware of the nature and extent of any defenses that the party liable on the contract (Garcia)might have against the assignor (Browning).

Tim Contracts with Home Dairy to Deliver a Bottle of Milk