Asked by
james champ
on Nov 28, 2024
Verified
To buy a truck under warranty from Detour Motors, Eli, a consumer, signs a note payable to the dealer. The note includes the notice required by FTC Rule 433. The dealer sells the note to Finance Company, which takes it in good faith, for value, and unaware of any defenses against payment. Eli discovers that the truck is defective and returns it to Detour Motors. The consumer can assert the breach of warranty to avoid payment on the note against
A) no one.
B) Detour Motors only.
C) Detour Motors and Finance Company.
D) Finance Company only.
Breach of Warranty
The failure to fulfill the terms of a warranty, either express or implied, regarding the condition, functionality, or quality of a product or service.
FTC Rule 433
A regulation also known as the "Holder in Due Course" rule, which protects consumers when they finance the purchase of goods or services.
Defective
Lacking in some necessary quality, faulty, or having defects, making it unfit for its intended use.
- Understand the effect of consumer protection laws on transactions involving negotiable instruments.
Verified Answer
SP
Learning Objectives
- Understand the effect of consumer protection laws on transactions involving negotiable instruments.