Question

Heather, an interior designer, bought a house and immediately made plans to make updates. Heather decided she would give the house an “open look” by having five sets of French doors opening from the back of the house onto a large patio. The doors were expensive, and Heather financed the purchase price of the doors by issuing a promissory note to the door manufacture. The door manufacturer sold the promissory note to a bank. A week after the promissory note matured, the doors began falling apart – they would not close properly, when it rained they leaked, etc. Heather refused to pay on her promissory note and brought action against the door manufacturer for breach of contract.

Will the bank recover on the promissory note?

Answer 1

Since the promissory note was already sold to the bank, it must be paid to the bank. Heather will have to pay to the bank since the bank was not involved in the sale of the doors and neither it has anything to do with the recovery of the damages.Heather can later recover the amount from the manufacturer.