Steven Vlohotis was a salesman for NESCOR, a home improvement company. He convinced the Antunas to sign a consumer credit contract with NESCOR to install vinyl siding and windows. The contract provided that the Antunas would pay for the improvements in installments. NESCOR assigned the contract to First Consumer Credit, LLC, which reassigned it to The Money Store (TMS). In keeping with FTC requirements, the contract contained the following language: “Any holder of this consumer credit contract is subject to all claims and defenses which the debtor could assert against the Seller of the goods or services pursuant hereto or with the proceeds hereof.”

Connecticut law (the Act) provides that, “No home improvement contract shall be valid or enforceable against an owner unless it is entered into by a registered salesman or a registered contractor.” The NESCOR salesman, Vlohotis, was not registered.          

Unhappy with NESCOR’s work, the Antunas stopped making payments under the contract. TMS filed suit, seeking to foreclose on their house. The Antunas moved for summary judgment, arguing that TMS could not enforce the contract because it was not a holder in due course.

Questions:

1. Does TMS have the right to foreclose on the Antunas’ home? Was TMS a holder in due course?

2. What caused the contract with NESCOR to be invalid?