Hammer Bought a Tool Set from Weekend Projects,Inc

question 8

Essay

Hammer bought a tool set from Weekend Projects,Inc.and signed a consumer credit contract promising to pay for the tool set in 12 monthly installments.Weekend promptly negotiated the instrument to its affiliate Easy Finance Co.in exchange for a discounted payment.Easy Finance gave value for the instrument,in good faith,and without knowledge of any defects or claims against the instrument.The tool set was defective and therefore Hammer stopped making the monthly payments.Easy Finance sues Hammer for the balance due on the instrument.Can Hammer raise the defense of breach of the implied warranty of merchantability against Easy Finance? Discuss.

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Definitions:

Treasury Bond

A long-term, interest-bearing security issued by the U.S. Treasury with a maturity period typically longer than ten years.

Ask

The lowest price a seller is willing to accept for a security.

AAA Corporate Bonds

High-grade corporate bonds rated AAA, indicating the highest level of creditworthiness and lowest risk of default.

Volatility

The rate at which the price of a security increases or decreases for a given set of returns, often measured by the standard deviation of historical daily price changes.