5. Audrey sells Barbara goods for $10,000. Audrey assigns her rights to receive

Question

5. Audrey sells Barbara goods for $10,000. Audrey assigns her rights to receive the $10,000 to Dolly Finance Corp. Barbara refuses to pay Dolly the $10,000. Barbara makes two arguments for not paying. First Barbara claims that Dolly has no privity of contract and that Dolly is not a third party beneficiary of its contract with Audrey. Second – Barbara claims that the goods were defective. Assume that the goods were defective and are worthless. You are the judge. Who wins and why? Address both arguments that Barbara makes.

Explanation / Answer

In the context of the given question, I will address this from two perspectives:

1. Barbara is right that Dolly Corp. is not legally held having a privity of contract and can't be confirmed to not be a third party beneficiary from the given information in the case study. Also, as it is seen that Audrey directly sells the goods to Barbara, Audrey should not be receiving the payment to Dolly Corp. unless a specific contract of beneficiary rights was put in place.

2. Regarding the second annotation of Barbara claiming the goods to be defective, if that's true, Barbara is not legally bound to make a payment of $10,000 to Audrey or Dolly Corp. in that case. However, if there is a specific clause of paying administrative charges by Barbara to Audrey for rejection of all manufactured goods, then they must be paid to Audrey. However, this information is missing in the above case study.

Consolidating both the perspectives, if I'm the judge, I would declare Barbara's claim to be winning over Audrey and dismiss all other claims and petitions by Audrey in this case.

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