Jerry purchased a laptop computer for his personal use from Computer City on an installment loan contract.The sales contract stated that in the event the contract is assigned to a third party,the purchaser (Jerry)promises he will not assert any claim or defense against the assignee which he might have against Computer City.Computer City immediately assigns the contract rights to Finance USA.The computer stops working within two weeks of the purchase.
A)This is a valid waiver of defense clause.Jerry signed the contract,so he can't raise a defense to Finance USA.
B)Finance USA is an intended third party beneficiary and may therefore enforce the contract.
C)In general,this type of waiver is not permitted in consumer contracts,so Jerry can raise his claim against Finance USA.
D)This is a delegation of Jerry's duties and the delegator remains liable on the contract unless a novation agreement is made.

Question

Quizplus · Accepted Answer

Waiver of defense clauses are generally not permitted in consumer contracts, and Jerry may still raise his claim against Finance USA, regardless of the clause in the sales contract. This is to protect consumers from being forced to give up their legal rights and defenses.

Jerry Purchased a Laptop Computer for His Personal Use from Computer