17-1 Inez has a specific set of plans to build a sailboat. The plans are detaile

Question

17-1 Inez has a specific set of plans to build a sailboat. The plans are detailed, and any boatbuilder can construct the boat. Inez secures bids, and the low bid is made by Whale of A Boat Corp. Inez contracts with Whalt to the build the boat for $40,000. Whale then receives unexpected business from elsewhere. To meet the delivery date in the contract with Inez, Whale delegates its obligation to build the boat, without Inez's consent to Quick Brothers, a reputable boat builder. When the boat is ready for delivery Inez learns of the delegation and refuses to accept delivery, even though the boat is built to her specifications. Discuss fully whether Inez is obligated to accept and pay for the boat. Further, would your answer be different if Inez had not had a specific set of plans but had instead contracted with Whale to design and build the boat? Explain.

17-2 As the building services manager for Fulton County, Georgia, Steve Fullard oversaw custodial services. Fullarddetermined which services to contract for, received the bids, and recommended the selection of a vendor. After the selection of Total Quality Maintenance of Georgia, (TQM) on a particular contract, Fullard supervised TQM's performance and received and processed its invoices. Later, TQM, assigned its unpaid invoices to American Factors of Nashville, Inc., which forwarded copies to Fullard with a statement rubber stamped on each invoice. The statement began with the word "NOTICE" and the name, address, and phone number of American Factors. It also said, "Remittance to to other than American Factors of Nashville, Inc., does not constitute payment of this Invoice". Included with each invoice was a certification by TQM's president that the invoice had been assigned to American Factors. Nevertheless, the county paid TQM on these invoices, and American Factors filed a suit in a Georgia State Court against the county claiming it still owed American Factors. Can the county be required to pay the same invoice twice? Why or why not? See Fulton County vs. American Factors of Nashville, Inc., 551 S.E. 2d 781 (Ga.App. 2001).

Explanation / Answer

17-1

Inez has to accept the boat and need to do the payment to Whale. Since Inez has a specific set of plans to build a sailboat, any reputable boat building company would be able to build the boat correctly. And whale has delegated it to someone else who has made it as per the requirement so This delegation is effective because the performance required is of a routine and nonpersonal nature. However, if Inez contracted with Whale to build and design a sailboat, Whale may have to get the consent of Inez to delegate its duties to Quick Brothers. This is because the performance by the third party may vary materially from that expected by Whale. The design of the boat may vastly vary between the two companies, and therefore Whale would have to obtain the consent of Inez to delegate its duties to Quick Brothers.

17-2

This case states the negligence on the part of the county. Because American factor as a process sent the statement to county which began with the word "NOTICE" and the name, address, and phone number of American Factors. It also said, "Remittance to to other than American Factors of Nashville, Inc., does not constitute payment of this Invoice". Included with each invoice was a certification by TQM's president that the invoice had been assigned to American Factors. Then it should be understood by the county that American factors has discounted the bills and it should not make the payment to TQM on these invoices. Now it has to pay to the American factor as per the process. Thats why The court granted a summary judgment in favor of American Factors, and the county appealed to a state intermediate appellate court, which affirmed the lower court's judgment. The appellate court explained that a person receives notice when "[i]t is duly delivered at the place of business through which the contract was made or at any other place held out by him as the place for receipt of such communications." Also, notice "received by an organization is effective from the time when it is brought to the attention of the individual conducting that transaction." The court cited Fullard's duties, adding that he was "the individual conducting [the] transaction" with TQM. Regarding the invoices, including those forwarded by American Factors, Fullard "is named as the addressee on each invoice, and his superior testified that Fullard received the invoices and processed them for payment . Adequate notification of the assignment, therefore, was received by the county." As for the county's being required to pay twice, the court explained that "[a] debtor of the assignor, who has notice of the assignment, pays the debt to the assignor at his own peril. It is the established rule in the United States that an assignment for a valuable consideration, with notice to the debtor, imposes on him an equitable and moral obligation to pay the assignee. The double payment is simply the legal consequence of the county's payment to the wrong party over notice.

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