Question

Case Credit Corp. (Case) finances the sale of farm equipment to farmers. Day bought farm equipment financed by Case, yet Day never actually signed the sales contract. Instead, an employee of Case forged Day’s signature on the sales contract with higher prices in an effort to pocket the difference for himself. Case was aware of the forgery but did not make any effort to stop the employee or inform Day. When Day could not pay the loans back, Case filed suit to recover the farm equipment or compel payment.

CASE QUESTIONS
1. If the court applies the clean hands' doctrine, will Case be able to recover the farm equipment because Day is unable to make the payments? Why or why not?
2. Are Case’s hands clean? Why or why not?

Answer 1

Answer:- The farm equipments will not be recovered by Case as the payments cannot be made by Day. The ruling of the court will be in favour of Day as in the case oriented it is provided that the incidence of forgery was known to Case but no action was taken by him to stop or inform Day. Thus it indicates that the court is not willing to give verdict on disputes on the basis of technicalities which is in favour of one party who did not act honestly and in this case, the transaction can be seen as a bad faith and fraudulent transaction.

Answer:- No, the hands of Case were not clean . this is mainly because of the definition of clean hand Case is required o be faithful and should not look to be benefited from the Day’s employee wrongdoing.