Question

olsen's contract with archer obligated olsen to pay archer $10,000. archer properly assigns the contract to able. at that time, able notifies olsen about the assignment. olsen, however, forgets and pays the $10,000 to archer rather than able. by this time, able is screaming for his money. but then archer goes into bankruptcy. in this case: group of answer choices olsen is liable to able for $10,000. able is out of luck because olsen performed his obligation by paying archer. olsen is liable to able not for the $10,000, but for his breach of the implied warranty that the assignor is solvent. able is out of luck because his notification was oral rather than written.

Answer 1

Olsen remains liable to Able for the $10,000 despite paying Archer, because after the assignment was communicated to him, his obligation to pay shifted to Able.

Step-by-step explanation:

When Olsen's contract with Archer was validly assigned to Able, and Able notified Olsen about the assignment, Olsen's obligation to pay the $10,000 shifted to Able. Olsen's payment to Archer, after the assignment had been communicated to him, does not discharge his obligation to Able. Therefore, even after making an erroneous payment to Archer, Olsen remains liable to Able for the $10,000. This is the general rule unless the parties agree otherwise or state statute dictates a different outcome. Additionally, the issue of bankruptcy does not negate Olsen's liability to Able. It is also important to note that notification of assignment does not necessarily need to be in writing unless specified by statute or the original contract.