Ann wanted to purchase a gift for her boyfriend, Ben. Ann and Ben went to Ritz
Jewelry to select the gift. Charles, the store manager, assisted them. Ann explained
to Charles that she wanted to purchase a gift for Ben, and that Ben could select
whatever he wanted. Ben chose a large gold chain costing $2,400.
Ann and Ritz executed a written installment sales contract which identified the
chain as “solid 18K gold,” stated the purchase price of $2,400 which was to be
paid by Ann in twenty-four equal monthly payments.
Ben wore the gold chain proudly, but the relationship with Ann ended a few
months later. When the two parted, Ann made it clear that Ben could keep the gold
chain. Ben subsequently took the chain to another jeweler for cleaning and then
discovered that the chain was not solid gold after all, but rather was gold plated
and the thin gold plating was wearing off the chain. Ben decided to make a claim
directly against Ritz for misrepresenting the chain’s quality, without involving
When Ben made the claim against Ritz, Ritz informed Ben that Ritz had assigned
the contract and its right to receive payments from Ann to CreditCo, a finance
company. Ritz had previously notified Ann of the assignment. Ann had paid six of
the twenty-four payments due under the installment sales contract. However, when
Ann learned that the gold chain was not solid 18K gold as represented, she stopped
making any more payments to CreditCo.
1. Can Ben prevail in a breach of contract action against Ritz? Discuss.
2. Is the assignment by Ritz to CreditCo effective? Discuss.
3. Can CreditCo prevail in a breach of contract action against Ann? Discuss.
For each of the above questions:
Discuss the issues raised, the arguments for both parties and the applicable law.
State your conclusions and the reasons therefore.
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