Question

Motors Repair Company contracts to sell a car to Nikki for $3,500. Nikki gives Motors Repair a worthless check for the price. Nikki assigns her right to the car to Opie. If Motors Repair refuses to deliver the car to Opie and Opie sues, can Motors Repair raise Nikki’s fraud as a defense against delivery of the car to Opie? Explain.

Answer 1

Motors Repair Company had contracted to sell a car to Nikki for $3,500.Then,Nikki transfers or assigns right to the car to Opie.Nikki pays a worthless check which is dishonoured for low funds or no funds in Nikki's bank account.Now,Opie sues Motors Repair Company for not delivering the car.As per contract and law,few contracts are not fulfilled and goods are not delivered until unless the payment is made.In this case,Nikki has made payment,but the check is dishonoured which means that there is a pending amount to be paid to Motors Repairs company.Breach of contract has taken place as check is dishonoured which is equal to attempting fraud.Motors Repair company can file a case against Nikki for attempting fraud and causing breach of contract as worthless or dishonoured check is paid.But,here Opie(to whom right to car is transfered)has sued Motors repair for not delivering the car.Now,Motors repairs has a chance to use Nikki's fraud,non payment,breach of contract as defense against delivering car to the Opie.According to law and order, a seller has all rights to deny to deliver goods to buyer when payment is not made and if fraud is attempted.In fact,Motors repair company can sue Nikki or Opie to pay compensation for breach of contract by submitting the dishounored or worthless check in the court.Then Nikki will be asked to complete either the payment of car or the compensation.Hence,Motors repair company can raise Nikki's fraud as defense against delivery of the car to the opie.