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Echo Acceptance Corp. v. Household Retail Services, Inc. Case Brief
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Case Brief Summary & Legal Analysis
tl;dr: Court affirmed that a financing company breached its agreement by ceasing post-termination payments, finding the payments were part of the purchase price for loan portfolios, not mere incentives, and the statute of frauds was inapplicable.
Legal Significance: Clarifies that ongoing participation payments in financing agreements can be construed as part of the purchase price, surviving agreement termination, and narrowly interprets “financial accommodation” under Colorado’s statute of frauds for credit agreements.
Echo Acceptance Corp. v. Household Retail Services, Inc. Law School Study Guide
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Case Facts & Court Holding
Key Facts & Case Background
Echo Acceptance Corporation (EAC), a subsidiary of Echosphere, facilitated financing for home satellite system sales. EAC entered into a Merchandise Financing Agreement (MFA) with Household Retail Services, Inc. (HRSI), whereby HRSI would purchase customer loan agreements from EAC. The MFA and subsequent pricing letters stipulated that HRSI would pay EAC a percentage of billed finance charges (“merchant participation”) and insurance charges. HRSI made these payments until it terminated the MFA, arguing its obligation ceased with termination as payments were mere incentives. Echo contended these payments were part of the purchase price for the loan portfolios and should continue for the life of each individual loan. The district court granted summary judgment for Echo on the breach claim, finding the MFA unambiguously required post-termination payments. HRSI also argued Echo’s claims were barred by Colorado’s statute of frauds for credit agreements, Colo.Rev.Stat. § 38-10-124, asserting the MFA was a credit agreement or related to underlying customer credit agreements. The district court rejected this defense. A jury determined the applicable participation rates.
Court Holding & Legal Precedent
Issue: Did the district court err in holding that the Merchandise Financing Agreement unambiguously required HRSI to continue making participation payments to Echo for the life of the acquired loan accounts after the MFA’s termination, and that Echo’s breach of contract claim was not barred by Colorado’s statute of frauds for credit agreements?
Affirmed in part, reversed in part. The court affirmed that the MFA Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est lab
IRAC Legal Analysis
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Legal Issue
Did the district court err in holding that the Merchandise Financing Agreement unambiguously required HRSI to continue making participation payments to Echo for the life of the acquired loan accounts after the MFA’s termination, and that Echo’s breach of contract claim was not barred by Colorado’s statute of frauds for credit agreements?
Conclusion
This case provides precedent for interpreting ongoing payment obligations in asset purchase Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commo
Legal Rule
Under Colorado law, contract interpretation seeks to ascertain and give effect to Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum
Legal Analysis
The court's primary analysis focused on contract interpretation and the applicability of Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint occaecat cupidatat non proident, sunt in culpa qui officia deserunt mollit anim id est laborum. Lorem ipsum dolor sit amet, consectetur adipiscing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua. Ut enim ad minim veniam, quis nostrud exercitation ullamco laboris nisi ut aliquip ex ea commodo consequat. Duis aute irure dolor in reprehenderit in voluptate velit esse cillum dolore eu fugiat nulla pariatur. Excepteur sint o
Flash-to-Full Case Opinions
Flash Summary
- Holding: Post-termination payments under a financing agreement were part of the