The Weyburn Farmers' Co-op contracted to sell a carload of grain to Mr.Takemori for $2000.The co-op assigned,in writing,its contractual right to receive the $2000 to the Royal Bank,to which it was indebted.The Royal Bank gave written notice of the assignment to Takemori.Unknown to the buyer and the seller,at the time of the contract the grain had been destroyed because of a train derailment caused by the negligence of the train conductor.On these facts,which of the following is true?
A)The Royal Bank will receive $2000 from Takemori because there was an assignment in writing and that is the sole test for determining whether the assignee will be paid the amount of the assignment.
B)The Royal Bank,the assignee,will receive the $2000 because it could prove privity of contract with Takemori.
C)The Royal Bank will receive part payment from Takemori.
D)The Royal Bank will receive nothing from Takemori,because Takemori owes nothing to the co-op.
E)Because of the conductor's negligence,the railroad will have to honour Takemori's contract with the Royal Bank.

Question

Quizplus · Accepted Answer

Takemori owes nothing to the co-op because the contract was for the sale of grain which had been destroyed before the contract was made due to the negligence of the train conductor. Therefore, the co-op could not assign its right to receive payment to the Royal Bank and the bank cannot demand payment from Takemori.

The Weyburn Farmers' Co-Op Contracted to Sell a Carload of Grain