Question

Molly decided to try and save money on her textbooks this semester. Instead of buying new books at the campus bookstore, Molly did the following: Molly and Pat signed a written contract that stated that "Pat will furnish the correct used business law book for use in Molly's business law class; and in return on January 15, 2017, Molly promises to pay Pat $50 for the book." Molly took the book and planned to pay Pat. Meanwhile, Pat properly assigned the contract to Jack because she owed him money. When Molly went to the first class session, however, she discovered that the book that she had received from Pat was no longer being used in that class. When Jack asked Molly for payment for the book, Molly refused to pay him. Molly told Jack that the book was useless to her and that she was not paying either him or Pat anything for it. Nor would she give him or Pat the book. Jack told Molly that he had an enforceable assignment in the form of a negotiable instrument and that he could collect regardless of whether the book was useless. Molly said she did not believe him, and ignored his requests for payment. Continuing with her attempt to save money on books, Molly agreed to buy Tim's U.S. history book for $40. She had an oral agreement with Tim that he would give her the book and that she would pay him in three days. This time Molly got the right book. Tim, in writing, properly assigned the right to the $40 payment to Richard. Three days later, Richard asked Molly for the money. Molly admitted she had agreed to pay Tim in three days, but told Richard that she was not going to pay him because he did not have a negotiable instrument. Nor did she pay Tim. Molly also purchased a communications book from Sam and in writing promised by the end of the week to give him a used DVD player she owned as payment. Two weeks have elapsed, and Molly still not given Sam the DVD player, even though he has made repeated requests. Does Jack have a negotiable instrument and can he collect from Molly? Why or why not? How about Richard? And Sam? Discuss and explain in detail the relevant law for each of the three scenarios set forth in this exam question.

Answer 1

Answer:

Does Jack have a negotiable instrument and can he collect from Molly? Why or why not?

• Jack does not have a valid negotiable instrument and cannot collect from Molly because the book was not "correct" since it was no longer used in the business law class. Molly should return incorrect book to Pat though. In this contract, neither party performed.  

How about Richard?

• Tim's oral agreement with Molly is valid since the amount is only $40 and Tim can assign it to Richard, but the assignment must be written. Without a written assignment of the debt, Richard cannot collect any money.

And Sam?

• Sam does have written agreement that can be legally enforceable. Although the costs and time of enforcing the contract are probably higher than the DVD (consideration).