Carl agrees to buy a refrigerator from his local appliance store under an instalment plan,with eight monthly payments of $100.The store immediately,and properly,assigns the deal to a finance company for $750 in cash.After the refrigerator is delivered it utterly fails to operate,and Carl refuses to make his payments to the finance company.The finance company demands continued payments and indicates that any issue of faulty goods must be taken up with the store as a separate matter.In this regard,it is in Carl's best interest to continue to make his payments lest he be successfully sued for being in breach of the agreement himself.

Question

Quizplus · Accepted Answer

Under the Uniform Commercial Code (UCC), Carl may have a defense against making payments due to the refrigerator's failure to operate, as the finance company, as an assignee, is subject to the same defenses Carl could assert against the store.

Carl Agrees to Buy a Refrigerator from His Local Appliance