Arnold buys a backhoe from Big Dig Equipment Inc. Arnold is unaware that Credit Collection Company holds a lien against the backhoe when he buys it. If Credit Collection repossesses the backhoe, Arnold can:

a. recover from Big Dig for breach of warranty.

b. do nothing.

c. file criminal charges against Big Dig and Credit Collection.

d. recover damages from Credit Collection for breach of warranty.

Answer: The answer is a, recover from Big Dig for breach of warranty

Explanation:

A lien is a legal claim on a personal property for the satisfaction of some debt or duty. The lien gives one the right to control, hold and retain the property of another untill some claim of the former is paid or satisfied. In the contract for the sale of goods, the breach of warranty gives the other party a right to claim for damages but not not to repudiate the contract. in the sales of goods contract, the buyer has no right to reject the goods because of breach of warranty. Since Arnold is unaware that credit collection holds a lien against the backhoe when he buys it. If credit collection repossesses the backhoe, Arnold can recover from Big Dig for breach of warranty because as at the time of buying the backhoe Big Dig did not inform Arnold that credit collection hold a lien against the backhoe, the lien gives credit collection a legal claim on the backhoe. In this case, Big Dig Equipment Inc has no right under the law to sell the backhoe again to Arnold, so Big Dig is liable.