Retail chain is jointly and severally liable with a financial institution in a lawsuit for having its brand stamped on credit cards

Retail chain is jointly and severally liable with a financial institution in a lawsuit for having its brand stamped on credit cards

In a recent decision, the Buenos Aires Court of Appeals for Commercial Matters ruled that a chain of retail stores is jointly and severally liable with a financial institution in a legal dispute for breach of contract and damages. In the case, a credit card financial institution had offered the plaintiff a card bearing the retail chain’s trademark.

The dispute arose because, once the contract had been signed, the credit card was not delivered to the client, but the client was charged for alleged debts owed to the financial institution, as well as having his name registered in a debtors’ bank. The individual then sued both the financial institution and the retail chain, asking for compensation for the breach of contract and the damages suffered.

In addition to the card bearing the retail chain’s brand, it was found that there was a commercial agreement whereby the company used a physical space in its stores to issue the cards. The Buenos Aires court ruled that the close commercial relationship made the retail chain jointly and severally liable for the financial institution’s actions under the contract.

In the court’s opinion, it was necessary to use articles 13 and 40 of the Argentine Consumer Defense Law, which establish joint and several liability towards the consumer of all those who intervene in the production chain of the product or service. It was also argued that the retailer’s brand on the card is part of good faith, which is expressed in consumer confidence as a result of advertising, corporate image, promotions and other market configurations and practices.

The Brazilian Consumer Defense Code, in its articles 7 and 25, similarly states that the obligation to compensate consumers for damages falls on all suppliers in the economic-productive chain. Thus, although the decision is a precedent only for cases tried in Argentina, it is relevant insofar as the two laws converge on the central point of the discussion.

Note 1: Text written from the article by Iris Quadrio, Carol O’Donnell and Delfina Calderale. Court of Appeals Confirms Joint Liability of a Retailer for Using Its Trademark on a Credit Card Offered by a Finance Company. Published at: https://www.marval.com. The case (File No. 79818/2016) can be accessed via the link: Poder Judicial de la Nación – República Argentina

Note 2: For quick release and cost control, this English version is provided by automated translation without human review.