But what would happen if:The legality of factoring companies advancing payment to brokers or carriers who broker freight has never been tested in Ontario courts. Using part of Michael Ludwig's example:
Broker A has a load worth $2,000, and sells it to Carrier B for $1,500. Carrier A assigns the invoice to ABC Factoring for $2000; however, $1500 of it is subject to the trust account provisions of the HTA, so only $500 legally could be sold to ABC Factoring. Could ABC be held liable for "knowingly" purchasing funds impressed with a trust?
Broker A has a load for $2,000 and sells it to Carrier B for $1,500 who in turn sells it to Carrier C for $2,500 and delivers it properly. The trust amount for Carrier B who factored it should be $2,500. Would the factor then be responsible for the $2,500 even if the invoice amount was $2,000 ??