Federal
Limits on HDC Rights
FTC Rule 433 (1976) abolished the
HDC doctrine in consumer credit transactions.
§ Allows Buyer to
assert any defense she might have against the Seller of goods or services (Car
Dealer), against the subsequent HDC (Bank) as well.
§ So Buyer’s duty
to pay is conditional on Seller’s full performance under contract.
Discharge
Discharge from liability on an
instrument can occur by:
§ Payment.
§ Cancellation or
Surrender.
§ Reacquisition.
§ Impairment of
Recourse.
§ Impairment of
Collateral.
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