McEnally purchased a refrigerator for his home from Peircault Appliance Store for $700. McEnally paid $200 in cash and signed an installment contract for $500, which in its entirety stated:
January 15, 2011
I promise to pay to the order of Peircault Appliance Store the sum of $500 in ten equal monthly installments. (Signed) McEnally
Peircault negotiated the installment contract to Hughes, who took the instrument for value, in good faith, without notice of any claim or defense of any party, and without question of the instrument’s authenticity. After McEnally had paid two installments, the refrigerator ceased operating, and McEnally wishes to recover his down payment and first two monthly payments and to discontinue further payments. What outcome?