Question

Samuel signed a contract to purchase fumiture on credit. The contract clearly set forth in bold print all charges included in the cost of the credit, including the interest rate and annual percentage rate. The seller informed Samuel that the seller regularly sold these contracts to a finance company that paid it immediate cash and then collected from the debtors, for example, Samuel. The seller further advised that the finance company did not want "the Headache" of determining the validity of consumer complaints and that therefore the contract provided that the consumer waived all defenses concerning the furniture against the finance company. The contract expressly provided that the seller would remain responsible for any nonconformities in the furniture or breaches of contract on its part. The furniture was defective, but the f,rnance company is demanding that Samuel make the payments to it required by the contract and resolve its disputes with the seller of the furniture. Samuel consults you regarding his rights. Explain. Please support your answer with legal analysis.

Answer 1

Samuel purchased furniture on the expectation of obtaining good quality products with no defects. This was expressly stated in the contract between the furniture seller and Samuel that the seller would be responsible for any non-conformities or breaches of contract on its part. Selling defective products would amount to a breach of contract on the part of the furniture seller and Samuel cannot be liable and made to suffer for such. The payment made to the seller is for the purchase of furniture. When the furniture is defective and needs to be replaced to Samuel there cannot be any expectation for payment pending this. The finance company was recommended by the furniture seller so the onus rests with the seller to intervene and liaise with the finance company. After all, the finance company cannot charge Samuel in the absence of a purchase or if the contract is breached. The finance company cannot wash away its liability or 'headache' from consumer rights matters and any contract framed in such a manner would be untenable on the grounds of it being arbitrary, unfair, and unjust. Contracts cannot be one-sided favouring one party over another. Taking advantage of Samuel's need for the furniture, the finance company through the furniture seller had induced Samuel to avail the finance and sign up for the credit to meet his need in purchasing the furniture. The finance company must temporarily stop pressuring Samuel for payment as there is a breach of contract on the part of its business partner who is the furniture seller. If Samuel were to reject the offer for replacement of defective product by the furniture seller then the finance company will have no further claims against Samuel as the original contract would become null and void. The finance company has a contract with Samuel based on this original contract between Samuel and the furniture seller and not directly with Samuel so it cannot enforce its secondary contract in the absence of the original one.