The credit company went into liquidation, owing approximately £2 million to garages for goods supplied to card holders, and being in turn owed approximately £3 million by card holders for products supplied through the use of cards. The company had assigned its receivables to another organization, and the question arose whether this organization, or the unpaid garages, were entitled to the money due from the card holders.

The Court of Appeal, in a unanimous decision affirming the judgment of Millett, J., at first instance,2 rejected the garages’ claim. Sir Nicolas Browne-Wilkinson, V.-C., with whom Nourse and Stuart-Smith, L.JJ., agreed, ruled that there is no general presumption that a buyer of goods is personally liable to pay for them. Though such a presumption has been established in cases involving payment by cheque, bill of exchange, or letter of credit, each individual method of payment must be examined afresh. In a credit card transaction, the contract of supply must be construed without the aid of this presumption, in order to determine whether the supplier can have recourse to the customer should the credit company fail to pay.

The Vice-Chancellor felt that little assistance could be drawn from cases dealing with payment by cheque. There the buyer, not the seller, chose the bank, which was the buyers’ agent and in no contractual relation with the seller. Although banker’s documentary credits offered a closer analogy, the commercial context in which they were used was quite different from the present case. A documentary credit was, typically, issued in order to finance an international transaction of some scale and was related solely to that transaction. The transaction itself would be the