Cengage Advantage Books: Business Law 9th Edition by Arnold Goldman ,William Sigismond

Exercise 5

Hughes purchased a new Lincoln Continental from Al Green Motors for $30,490 and made a down payment of $2,490. The balance due was financed through a local bank. Hughes took immediate possession, but it was agreed that she would return the car to the dealership for normal new car preparations. On the way home, Hughes was in a car accident that, through no fault of hers, caused extensive damage to the car. Regardless of the damage, the car dealer issued a certificate of title (ownership) to her after receiving a check from the bank through which she financed the car. Hughes now claims that Al Green Motors had no right to issue her a certificate of title because the car, having been damaged, was not the car she bargained for, an undamaged Lincoln Continental. Al Green Motors claimed it had every right to issue the title because it was not responsible for the damage to the car. Is Al Green Motors correct? (Hughes v. Al Green, Inc., 418 N.E.2d 1355)