Reference no: EM131166195

The farmers are former customers of Ron Kaufman, the owner and operator of Southeast Implements, Inc., a Case International Harvester equipment dealership. Between 1996 and 1998, they agreed to purchase or lease various items of farm equipment from Southeast. In each instance, the farmers and Kaufman orally negotiated the terms of the purchases/leases, and Kaufman then prepared written purchase agreements for each transaction, assigning his rights thereunder to Case. Case, in turn, after approving the assignments and agreeing to finance the purchases/leases, paid Kaufman for the equipment and looked to the farmers, as debtors, for payment. The written purchase agreements, however, were prepared and assigned without the farmers' knowledge and did not reflect the terms of the oral contracts.

Kaufman inflated the purchase/lease prices and forged the farmers' signatures, thereby obtaining thousands of dollars in overpayments from Case. When Case became aware of Kaufman's fraud, it sent representatives to meet with the individual farmers. After verifying that the farmers were in possession of equipment covered by the forged purchase agreements, Case attempted to enforce the terms of the forged contracts. The farmers alleged that Case's assignment was improper because the rights assigned were not the ones to which the farmers agreed. The farmers filed suit against Case and Southeast. The court found in favor of Case, and the farmers appealed. Is Kaufman's assignment made to Case binding? What defenses might the farmers have against Case?