Allen Hired Beth to Do a Marketing Survey

question 10

Multiple Choice

Allen hired Beth to do a marketing survey. The contract provided that she would start the work on January 15 and finish it by March 15, the date for completion being a condition on the contract. She would be paid $2000. After one month of work, when the work was half completed, Beth assigned the $2000 contract price to Charlie, from whom she had bought computer hardware. Charlie gave written notice of the assignment to Allen on the same day. The second month's work went badly. Information entered into the computer was lost and Beth could not finish on time. She was five days late, and each day cost Allen $100. His total foreseeable loss was $500 because of her breach. On these facts, which of the following is true?

• A) Charlie could receive only $1000 from Allen because half of the $2000 project was finished when he gave notice of the assignment to Allen.
• B) Charlie could receive $2000 from Allen because that is the amount owed to Charlie and the amount assigned by Beth.
• C) Charlie could receive $1500, because when the contract was completed, that was all that was legally owed to Beth.
• D) Charlie could receive only $1000 from Allen because only half the work was done when the assignment was made.
• E) Charlie gets $0 from Allen because one can assign contractual obligations but not contractual rights.

---

Definitions:

Internal Control

Procedures and policies implemented by a company to safeguard its assets, ensure financial accuracy, and promote operational efficiency.

Canceled Checks

Checks that have been paid and processed by a bank, no longer negotiable, serving as proof of payment.

Negotiable

Capable of being transferred or exchanged with ease, often referring to financial instruments.

Internal Control System

Procedures and policies implemented by a company to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.