Janet Jones sold the assets and liabilities of her coin-operated laundry to Kevi

Question

Janet Jones sold the assets and liabilities of her coin-operated laundry to Kevin Katz for $10,000. The assets of the business included all of the washers and dryers. The liabilities included the amounts still owing on seven new dryers, which had been purchased recently from Dryer Company under an installment contract. Katz agreed to make the installment payments on the new dryers as they came due. After Katz failed to make an installment payment when it was due, Dryer Company sued Jones. Jones claimed she no longer was liable. How will the court decide?

Explanation / Answer

The court will decide in favour of the dryer company.

Explanation:

This is because the sale of the business to Katz involved both an assignment ofrights and a delegation of duties.Although Jones delegated to Katz the duty to make payments under the contract with Dryer Company,she remains liable to Dryer Company for Katz's failure to perform and must make the installment payments to Dryer Company if Katz does not do so.

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