Thomas borrowed $100,000 from First Bank, which asked that he both put up collateral
and provide a surety. Consequently, Thomas provided the bank with a security interest
in his antique car collection and asked Victor to act as a surety. Victor agreed to do so
and signed a surety agreement with the bank. Thomas made several payments on the
loan and then asked First Bank for permission to sell three of his cars. First Bank
agreed, but it never notified Victor of the sale of the collateral. Thomas then defaults on
the loan. First Bank now wants Victor to pay the remainder of the loan. Must Victor
pay? Explain.
Charlene drafted a will in 1992 stating as follows: “I hereby leave my 80-acre farm to
Arthur, my pure-bred golden retriever to Brian, and $20,000 each to Dana and Ellen.”
In 1997, Charlene sold her farm and in 1998 her dog died. Charlene died in 2004
without having changed her will and with $15,000 in the bank. If there are no
administrative costs or bills to be paid by the estate, what amount will Arthur, Brian,
Dana, and Ellen receive under the will?
If two parties have unperfected security interests in the same collateral, the first to
attach has priority.
A person who receives a share of the profits of a business is presumed to be a partner.
The European Community (EC) preceded the European Union (EU) and worked to
remove trade barriers between member nations.
The Code does not label the warranty of title as an implied warranty, despite the fact
that it arises out of the sale and not from the words or conduct of the parties.
A receiver is a disinterested person who collects and preserves the debtor’s assets and
income and disposes of them at the direction of the court which appointed the receiver.
An automobile buyer in the ordinary course of business will take free and clear of a
security interest created by the buyer’s seller.
Because private causes of action have proved to be adequate to recompense and prevent
environmental damage, the federal, state, and local governments have chosen to create
few statutes designed to protect the environment.
The most restrictive test for the issuance of dividends by a corporation is the net assets
test.
George is a shareholder in the Muncy Kempf Corporation. He learns of insider trading
by one of the directors and wants to sue the corporation on behalf of the corporation
and its shareholders. A shareholder cannot sue the corporation to enforce a right
belonging to the corporation.
The Fifth Amendment would protect a defendant from having to give blood samples to
the prosecution, since that could be a form of self-incrimination as interpreted by the
courts.
A collection agency may personally contact the debtor even if the debtor has engaged a
lawyer to represent him.
Steve paid $500,000 for the purchase of a “franchise” in a new professional soccer
league. The franchise is in the form of a limited partnership under which Steve is not
permitted to actively participate in the management of the team. The promoters of the
league are to do all of the management and to make all of the decisions regarding that
management. Steve will receive 15% of all gate receipts and revenue generated from
the sale of licensed items such as jackets and coffee mugs. Is the franchise a security
within the meaning of the federal securities laws?
A person taking a prescription medication will be treated the same as an incompetent
under the cognitive ability test.
Dan signs a note “Dan Mason, Agent” without disclosing his principal’s name. Dan is
liable to a holder in due course without notice that Dan was not intended to be liable.
At its discretion, a court may grant the equitable remedy of injunction against breach of
a contractual duty where damages would be inadequate.
A part performance exception to the statute of frauds in many states requires both that
the transferee has paid at least a portion of the purchase price and has either taken
possession of the real estate or has started to make valuable improvements on it.
Reliance is a necessary element in any breach of warranty case.
A “person” for purposes of a limited partnership can be a corporation.