What Would Be the Most Likely Result If Fred Sues

question 58

Multiple Choice

What would be the most likely result if Fred sues Harry for the $4,000 payment?

• A) Harry will win because he did not expressly agree to the assignment.
• B) Fred will win because the right to receive payment could be validly assigned.
• C) Fred will win unless Harry can prove that Fred knew that Harry did not want the benefits assigned.
• D) Fred will lose unless Fred can prove that he was unaware that Harry did not want the benefits assigned.
• E) Harry will win because the portrait was personal in nature and payment for it could not be assigned.

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Definitions:

Restricting Payment

Implies conditions or limitations placed on the distribution or release of funds.

Special Indorsement

A signature on a negotiable instrument, such as a check, that specifies the person to whom the instrument is to be payable, thereby restricting further transfer.

Pay to the Order

A phrase written on checks or drafts instructing the financial institution to pay the specified amount to the individual or entity named.

Trust

A fiduciary relationship in which one party, known as the trustee, holds property on behalf of another party, known as the beneficiary.