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Henningsen purchased a brand-new Plymouth automobile from Bloomfied Motors and gave it to his wife as a gift.
Henningsen had the contract with Bloomfield Motors for purchase of the car. His wife was the beneficiary of the contract with Bloomfield Motors.
While driving the new car Henningsen's wife crashed into a brick wall and was injured because a defect in the steering wheel caused her to lose control of the car.
The car was defective.
She sued Bloomfield motors for her injuries under the breach of implied warranty of merchantability. Bloomfield motors claimed that there was no privity of contract between them and Mrs. Henningsen and that she could not recover. Can Mrs. Henningsen recover from Bloomfield Motors?
Mrs. Henningsen was the third part beneficiary of the contract between Mr. Henningsen and Bloomfield Motors for the purchase of the car. Mrs. Henningsen was probably not mentioned in the contract, but Mr. Henningsen intended Mrs. Henningsen to be the beneficiary of the contract. Because Mrs. Henningsen is the intended third party beneficiary of the contract, she has the right to sue for breach of the implied warranty of merchantability.
Here is a link to a definition of an intended beneficiary: http://en.wikipedia.org/wiki/Third_party_beneficiary.
Husted purchased a used car from Reed Motors and obtained a loan through the First National Bank.
Husted has a contract to purchase a car from Reed Motors. He had a separate contract with First National Bank to finance the purchase of the car.
The car broke down and could no longer be used.
The car was not fit for the purpose Husted purchased it, but it does not say when the car broke down.
Husted refused to pay the balance due on the car.
Husted breached his contract with First National Bank to repay his loan.
At the time the car was purchased the contract signed by Husted contained a conspicuous clause stating that the buyer accepted the car in its present condition. The contract also contained other languages indicating that the car was sold as is.
The car had disclaimers of any warranties associated with the condition of the car.
Was Husted responsible for paying the balance due on the car?
Husted contracted to purchase a car from Reed Motors, but the Reed Motors sales agreement specifically disclaimed warranties that the car was operable or otherwise in good condition. In some jurisdictions, Lemon Laws require that a dealer provide statutory warranties, even for used cars -- although those warranty periods can be very short, for example, 30 days. If Reed Motors was not in a state that required that warranty, the "as is" provision in the sale was effective. If Reed Motors was in a state that required that a dealer provide a warranty for a used car and the car broke down in the warranty period, Reed Motors would be required to comply with the warranty.
However, First National Bank did not warranty the car, and was under no obligation to make sure it kept running for Husted. The failure of the car was not First National Bank's fault, so Husted could not decide he wouldn't make payments to the bank.
Husted's remedy, if one is available, is against Reed Motors. Husted must continue paying First National Bank.
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