Question: The Situation: Mega Store, Inc. ( MSI ) purchases Smalltown Hardware store. As part of the purchase agreement, MSI agrees to pay all the creditors

The Situation: Mega Store, Inc. (MSI) purchases Smalltown Hardware store. As part of the purchase agreement, MSI agrees to pay all the creditors of Smalltown Hardware store. One creditor is Nuts & Bolts, Inc. which is owed $5,400 by Smalltown Hardware for inventory the store purchased. Mega Store, Inc. contacts Nuts & Bolts to let it know it now owns the former Smalltown Hardware store and has assumed all the Smalltown Hardware store debts.
12. Is the above situation with Mega Store, Inc., Smalltown Hardware and Nuts & Bolts, Inc. an example of a third party beneficiary contract? _____(Yes / No, it is an assignment / No, it is a delegation)
13. Is Nuts & Bolts an intended beneficiary of the contract between Mega Store and Smalltown Hardware? _____(Yes, it is a creditor beneficiary / Yes, it is a donee beneficiary / No, Nuts & Bolts is an incidental beneficiary)
14. If the new owner of the business, Mega Store, Inc. does not pay Nuts & Bolts, Inc., can Nuts and Bolts, Inc. sue Mega Store for payment? ____(Yes / No - the agreement between Mega Store and Smalltown Hardware does not give Nuts & Bolts a legal right to sue Mega Store for nonpayment)

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