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Ford Motor Credit Co. v. Russell - 519 N.W.2d 460 (Minn. Ct. App. 1994)

Rule:

If goods are advertised for sale at a certain price, it is not an offer and no contract is formed; such an advertisement is merely an invitation to bargain rather than an offer. The test of whether a binding obligation may originate in advertisements addressed to the general public is whether the facts show that some performance was promised in positive terms in return for something requested.

Facts:

Respondent car dealership, Monticello Ford and Mercury, Inc., advertised the sale of an automobile with a certain annual percentage rate (APR), but then sold the automobile to appellant purchaser Dawn Russell at a higher APR than advertised, based upon her credit history.  Respondent creditor, Ford Motor Credit, Co., filed an action for deficiency judgment against the purchaser and her father, Mr. Russell, who had co-signed the loan, after repossessing and selling the automobile. The Russells counterclaimed, alleging breach of contract and violation of the Minnesota Motor Vehicle Retail Installment Sales Act, the Federal Truth in Lending Act and the Federal Equal Credit Opportunity Act, and named Respondent Monticello Ford as a third-party defendant. The district court granted Respondent Ford Credit's motion for summary judgment on its deficiency claim, and Respondent Monticello Ford's motion for summary judgment on the Russells' third-party complaint. The Russells appealed.

Issue:

Is an advertisement a form of contract?

Answer:

No.

Conclusion:

The appellate court affirmed the summary judgment entered in favor of Respondents car dealership and creditor, concluding that because the advertisement did not create a contract, respondents did not violate Equal Credit Opportunity Act, the Truth in Lending Act, or the Motor Vehicle Retail Installment Sales Act, and there was no evidence of commercial unreasonableness in the method of sale.

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