Question

Larry London (LL) buys a computer with his new store credit card at Greatest Get (GG). GG immediately sells the right to receive monthly payments from LL to a finance company, Friendly Finance (FF). Unfortunately for LL, the computer stops working three months after he purchased it. As GG won’t return his calls regarding his broken PC, LL stops making payments. Long story short, all stakeholders (LL, GG, and FF) are fed up with each other’s behavior; they all lawyer up.

If your last name begins with A-H, you are LL’s lawyer.

Explain to your client all the possible issues that help and hurt his or her chances of winning a potential lawsuit. For example, you may want to consider whether the parties have a negotiable instrument. If so, what kind? What defenses might there be on that instrument?

Answer 1

In the view of A-H here are some points needed to be addressed.

1) It states that LL bought a computer with his store credit card. Usually a credit card doesn't come under a negotiable instrument without an exclusive promissory note.

(a) Has LL signed a promissory note while accepting the store card (in case if it is from GG) or while making the payment for the computer? If not then LL has no legal obligation with FF.

2) LL 's computer stopped working after 3 months from the purchase date.

(a) Does he have any warranty/guarantee agreement with GG for the product?

(b) Is GG a reseller for any other computer manufacturer that provides warranty for their original product?

The solution and scope purely relies on the above questions.

LL has signed the promissory note with GG- Scenario analysis

(a) Warranty is available from the original manufacturer for the product GG sells. Here LL is responsible for the payment to FF.

(b) GG provides a warranty for the computer. Based on their warranty term this needs to be addressed separately since both the parties violated their agreement.

(c) No warranty from both GG and the original manufacturer. LL is responsible here for the pending payment to FF.

LL has not signed a promissory note with GG- Scenario analysis

(a) GG and the original manufacturer of the computer is not providing any warranty for the product. Here LL is responsible for payment to GG but due to FF case needed separate analysis because, without the concern of LL, GG brought FF into their credit card agreement.

(b) GG is responsible to provide the warranty. In here LL can file a lawsuit against GG.

(c) Warranty is being provided by the original manufacturer. LL is responsible for the payment to GG in here but due to the involvement of FF this should be considered separately.

Based on the above analysis a strategy to protect LL's interest can be prepared