Tom borrowed money from First Bank to pay for his college tuition. Tom has been
ID: 419450 • Letter: T
Question
Tom borrowed money from First Bank to pay for his college tuition. Tom has been repaying the loan in monthly installments for 1 year (he has 8 years to go). At the end of the first year, First Bank assigned all of its rights under the loan agreement with Tom to Second Bank. Three months have passed since the assignment and no one has told Tom that the contract has been assigned. Tom has continued to make his monthly payments to First Bank. Is the assignment from First Bank to Second Bank effective? Select one: a. No, because no notice of the assignment was given to Tom. b. Yes, but only if Tom paid consideration for the assignment. c. No, because this type of right to receive payment of money is personal in nature and not assignable. d. No, because failure to notify Tom invalidates the assignment. e. None of the aboveExplanation / Answer
No, because failure to notify invalidate the assignment
Since Tom is paying money to first bank and he is not aware of assignment as he haven't received any notice