Simon bought a used yacht from Marvel's Marina and Boatyard for $70,000 to be paid in installments over six years. He traded in his smaller yacht for $10,000 at the same time, but Marvel wanted to keep the two transactions separate for financial reasons and he promised to issue a cheque to Simon for the trade-in. Marvel assigned the $70,000 contract to Strait and Naro Finance (S and N). The first Simon knew of this was when he received copies of both contracts and a notice to pay the payments to S and N. In the situation given, which of the following is most correct?

Question

Quizplus · Accepted Answer

When Marvel assigned the contract to S and N, Simon became obligated to make payments to S and N. Therefore, Simon must make the payments to S and N from now on. Option B is incorrect because once the contract is assigned, Simon must pay the new assignee. Option C is incorrect because Marvel is allowed to assign contractual rights, and in this case, Simon became obligated to make payments to S and N once the contract was assigned to them. Option D is incorrect because S and N are now the rightful recipients of the payments and Simon is obligated to make payments to them.

Simon Bought a Used Yacht from Marvel's Marina and Boatyard