Tyron purchased a $2900 promissory note from Jared for the discounted amount of
$2500. Tyron paid value, in good faith and without notice of any outstanding claims
against this promissory note that read, “Pay to the order of Jared $2900 on July 1, 2009,
for the purchase of a 2001 Ford Taurus provided no major problems with the car arise
prior to said payment date.” Tyron is a holder in due course of a negotiable note.
Spangel Fashions sends out its spring and summer catalog to Cindy. Cindy falls in love
with the cute dress featured on the front cover of the catalog. When Cindy calls to order
the dress, she is informed that the company has sold out of the dress. Cindy is upset and
claims that the store is in breach of contract. She argues that the catalog presented an
offer, which she accepted when she called to order the dress. Is Cindy correct?
Why/why not?
What are the advantages and disadvantages of using arbitration rather than litigation?
If a court finds as a matter of law that a clause of a contract was unconscionable at the
time the contract was made, the court must refuse to enforce the contract.
John Akers, former chairman of IBM, argues that ethics are not important to economic
competitiveness.
Jerry knows that Lucy has coveted his classic car for quite some time. Finally willing to
sell it, he sends a letter to Lucy offering to sell the car for $15,000. Lucy responds by
saying she needs time to arrange financing. Lucy offers Jerry $100 to keep the offer
open for two weeks. Jerry agrees, taking the $100. Three days later, Roberta contacts
Jerry saying she is interested in buying the car and has the cash to buy it outright. Jerry
is concerned that if he doesn’t sell the car to Roberta now, she may not be interested
later. Furthermore, Lucy may never be able to arrange financing. Jerry is afraid he may
end up with no buyer at all. He comes to you for advice. What do you advise?
Matt, a dissident shareholder, can run for director by placing his name on the companys
proxy statement.
Loraine is a shareholder of Taley Corp. She would like to inspect and copy the
company’s minute book, accounting records, and shareholder lists. Under what
circumstances is Loraine allowed to inspect or copy corporate records?
Ramona, age 42, orally agreed to work for Brahma, Inc. for the rest of her life for
$50,000 per year. This agreement would not be enforceable since it violates the
one-year rule of the statute of frauds.
Identify six possible remedies for a seller when the buyer breaches a contract.
In purchasing life insurance, Kelsey concealed the fact that she has a muscular disease.
The insurance company can void the policy if the muscular disease is found to be a
material fact.
Typos are almost always detrimental to the validity of a contract because they cause the
contract to not reflect the true agreement of the parties.
Alice signs a contract with Bob to buy Bob’s house for $150,000, with the clause, “if I
am able to obtain a mortgage loan for $125,000, at no more than 7% interest, payable
over 15 years.” Assume that Alice tries but is unable to obtain the described loan, and
therefore refuses to proceed with the purchase. Alice is in breach of the contract.
Jackie learned of insider trading information while talking to Mark, a director of a large
corporation. She took advantage of the information to buy stock and make a huge
financial gain. If she is accused of violating securities law, what must the government
prove in order to gain a conviction against Jackie?
Andy, Becky and Charlie formed a partnership. Their business was to create Web pages
for students. They would take a person’s academic and career information and make an
attractive Web page. Andy supplied the computer and technical advice. Becky was the
business manager. Charlie did the bulk of the marketing. Charlie and Becky became
irritated with Andy, as it seemed they did more work than he did. Charlie and Becky
decided to end their partnership with Andy. During the winding up process, how are the
assets of the partnership paid out?