Allan Zimmerman created a contract with Echo Helstrom for the design and manufacture of a custom guitar.
Question:
Allan Zimmerman created a contract with Echo Helstrom for the design and manufacture of a custom guitar. Upon delivery of the instrument, Helstrom paid Zimmerman by providing a cheque, drawn in his favour, for $10 000. Zimmerman endorsed that cheque and gave it to Hibbing Music Inc in an effort to discharge a debt of $10 000 that he owed to the company. Before the company could obtain payment on the cheque, however, Helstrom discovered a serious defect in the guitar that she had purchased from Zimmerman. As a courtesy, she contacted Hibbing Music Inc, knowing that it had received the cheque from Zimmerman, and told them that since her guitar was flawed, she was not willing to pay anything more than $7500 on the cheque. (She is correct in at least one sense: in its current condition, the guitar is worth $7500, rather than $10 000.) The company, in contrast, insists that it is not affected by Zimmerman’s flawed workmanship and that it is entitled to the full amount of the cheque. How would a court likely resolve the dispute? Explain your answer.
Step by Step Answer:
Managing the Law The Legal Aspects of Doing Business
ISBN: 978-0132164429
4th edition
Authors: Mitchell McInnes, Ian R. Kerr, J. Anthony VanDuzer