Archives: Solution Manual

ANSWERS TO PROBLEMS 1. Brown, the president and director of a corporation engaged in owning and operating a chain of motels, was advised, on what seemed to be good authority, that a superhighway was to be constructed through the town […]

CASE 35-4 BREHM v. EISNER Supreme Court of Delaware, 2000 746 A.2d 244 http://scholar.google.com/scholar_case? q=746+A.2D+244+&hl=en&as_sdt=2,34&case=2721397479365362562&scilh=0 Veasey, C. J. [On October 1, 1995, Disney hired as its president Michael S. Ovitz, who was a long-time friend of Disney Chairman and CEO […]

III. ROLE OF DIRECTORS AND OFFICERS By statute, management of a corporation is vested in the board of directors. The board determines general corporate policy and appoints offcers to execute the policy and administer the day-to-day operations of the corporation. […]

Chapter 35 MANAGEMENT STRUCTURE I. Corporate Governance II. Role of Shareholders A. Voting Rights of Shareholders 1. Shareholder Meetings 2. Quorum and Voting 3. Election of Directors a. Straight Voting b. Cumulative Voting 4. Removal of Directors 5. Approval of […]

ANSWERS TO PROBLEMS 1. Olympic National Agencies was organized with an authorized capitalization of preferred stock and common stock. The articles of incorporation provided for a 7 percent annual dividend for the preferred stock. The articles further stated that the […]

III. DIVIDENDS AND OTHER DISTRIBUTIONS A. TYPES OF DIVIDENDS & OTHER DISTRIBUTIONS The Revised Act definition of a “distribution”: “a direct or indirect transfer of money or other property (except its own shares) or incurrence of indebtedness, by a corporation […]

Chapter 34 FINANCIAL STRUCTURE I. Debt Securities A. Authority to Issue Debt Securities B. Types of Debt Securities 1. Unsecured Bonds 2. Secured Bonds 3. Income Bonds 4. Convertible Bonds 5. Callable Bonds II. Equity Securities A. Issuance of Shares […]

ANSWERS TO PROBLEMS 1. After part of the shares of a proposed corporation had been successfully subscribed, the promoter hired a carpenter to repair a building that was intended to be conveyed to the proposed corporation. The promoter subsequently secured […]

III. RECOGNITION OR DISREGARD OF CORPORATENESS Errors or omissions in incorporation procedures may or may not cause the courts to regard an organization as a non-corporation. Conversely, even a properly formed corporation may be regarded as a non-corporation if justice […]

Part Seven: Corporations CONTENTS Chapter 33 Nature, Formation, and Powers Chapter 34 Financial Structure Chapter 35 Management Structure Chapter 36 Fundamental Changes ETHICS QUESTIONS RAISED IN THIS PART 1. Corporations owe their existence to the issuance of a charter by […]

ANSWERS TO PROBLEMS 1. John Palmer and Henry Morrison formed the limited partnership of Palmer & Morrison for the management of the Huntington Hotel. The limited partnership agreement provided that Palmer would contribute $400,000 and be a general partner and […]

CASE 32-4 ESTATE OF COUNTRYMAN v. FARMERS COOP. ASS’N Supreme Court of Iowa, 2004 679 N.W.2d 598 http://scholar.google.com/scholar_case?q=679+n.w.2d+598&hl=en&as_sdt=2,34&case=12820500586608385138&scilh=0 Cady, J. In the afternoon of September 6, 1999, an explosion leveled the home of Jerry Usovsky (Usovsky) in Richland, Iowa. Tragically, […]

Chapter 32 LIMITED PARTNERSHIPS & LIMITED LIABILITY COMPANIES A. Limited Partnerships 1. Definition 2. Formation a. Filing of Certificate b. Name c. Contributions d. Defective Formation e. Foreign Limited Partnerships 3. Rights a. Control e. Voting Rights b. Choice of […]

13. Ames, Bell, and Cole were equal partners in the ABC Construction Company. Their written partnership agreement provided that the partnership would dissolve upon the death of any partner. Cole died on June 30, and his widow, Cora Cole, qualified […]

ANSWERS TO PROBLEMS 1. Albert, Betty, and Carol own and operate the Roy Lumber Company. Each contributed one-third of the capital, and they share equally in the profits and losses. Their partnership agreement provides that two partners must authorize all […]

CASE 31-3 HORIZON/CMS HEALTHCARE CORPORATION v. SOUTHERN OAKS HEALTH CARE, INC. Court of Appeal of Florida, Fifth District, 1999 732 So.2d 1156, petition for review denied, 744 So.2d 454 http://scholar.google.com/scholar_case?case=12151982165035491195&q=732+So. +2d+1156&hl=en&as_sdt=2,34 Goshorn, J. [Horizon is a large, publicly traded provider […]

*** Chapter Outcome *** Distinguish between the liability of an incoming partner for debts arising before his or her admission and those arising after admission. D. LIABILITY OF INCOMING PARTNER A person admitted as a partner into an existing partnership […]

Chapter 31 OPERATION AND DISSOLUTION OF GENERAL PARTNERSHIPS I. Relationship of Partners and Partners with Third Parties A. Contracts of Partnership 1. Authority to Bind Partnership a. Actual Express Authority b. Actual Implied Authority c. Apparent Authority 2. Partnership by […]

ANSWERS TO PROBLEMS 1. Lynn and Jack jointly own shares of stock of a corporation, have a joint bank account, and have purchased and own as tenants in common a piece of real estate. They share equally the dividends paid […]

I. RELATIONSHIPS AMONG PARTNERS The operation and management of a partnership involves interactions among the partners as well as their interactions with third persons. This chapter will consider both of these relationships. The first part of the chapter focuses on […]

CASE 30-1 IN RE KEYTRONICS Supreme Court of Nebraska, 2008 274 Neb. 936, 744 N.W.2d 425 http://scholar.google.com/scholar_case?case=18315123236442947796&q=744+N.W.2d+425&hl=en&as_sdt=2,34 McCormack, J. [In 1999 King was doing business under the name of “Washco” as a sole proprietorship engaged in selling, installing, and servicing […]

Part Six: Unincorporated Business Associations CONTENTS Chapter 30 Formation and Internal Relations of General Partnerships Chapter 31 Operation and Dissolution of General Partnerships Chapter 32 Limited Partnerships and Limited Liability Companies ETHICS QUESTIONS RAISED IN THIS PART 1. From an […]

ANSWERS TO PROBLEMS 1. On November 9, Jane Jones writes a check for $5,000 payable to Ralph Rodgers in payment for goods to be received later in the month. Before the close of business on November 9, Jane notifies the […]

CASE 29-3 Seigel v. Merrill Lynch, Pierce, Fenner & Smith, Inc. Steadman J. * * * The events giving rise to this lawsuit arose in January and February of 1997 * * * . During that time period, plainti /appellant […]

Chapter 29 BANK DEPOSITS, COLLECTIONS, AND FUNDS TRANSFERS I. Bank Deposits and Collections A. Collection of Items 1. Collecting Banks a. Duty of Care b. Duty to Act Timely c. Indorsements d. Warranties e. Final Payment 2. Payor Banks B. […]

ANSWERS TO PROBLEMS 1. $900.00 Smalltown, Illinois November 15, 2014 The undersigned promises to pay to the order of John Doe, Nine Hundred Dollars with interest from date of note. Payment to be made in five monthly installments of One […]

CASE 28-3 DAVIS v. WATSON BROTHERS PLUMBING, INC. Court of Civil Appeals of Texas, Dallas, 1981 615 S. W.2d 844 http://scholar.google.com/scholar_case?case=16807682647541897506&hl=en&as_sdt=2&as_vis=1&oi=scholarr Akin, J. Defendant was the drawer of a check for $152.38 payable to its employee Arnett Lee. Lee, in […]

Chapter 28 LIABILITY OF PARTIES I. Contractual Liability A. Signature 1. Authorized Signatures 2. Unauthorized Signatures a a. Ratification of Unauthorized Signature b. Negligence Contributing to Forged Signature B. Liability of Primary Parties 1. Makers 2. Acceptors C. Liability of […]

15. Donna gives Peter a check for $3,000 in return for a desktop computer. The check is dated December 2. Peter transfers the check for value to Howard on December 14, and Howard deposits it in his bank on December […]

ANSWERS TO PROBLEMS 1. Roy Rand executed and delivered the following note to Sue Sims: “Chicago, Illinois, June 1, 2014; I promise to pay to Sue Sims or bearer, on or before July 1, 2014, the sum of $7,000. This […]

CASE 27-4 ANY KIND CHECKS CASHED, INC. v. TALCOTT Court of Appeal of Florida, Fourth District, 2002 830 So.2d 160, 48 U.C.C. Rep.Serv.2d 800, rehearing denied http://scholar.google.com/scholar_case? case=12205265320792531036&q=830+So.2d+160&hl=en&as_sdt=2,10 Gross, J. [In the mid-1990s, D. J. Rivera, a “financial advisor,” sold […]

Chapter 27 TRANSFER AND HOLDER IN DUE COURSE I. Transfer A. Negotiation 1. Negotiation of Bearer Paper 2. Negotiation of Order Paper a. The Impostor Rule b. The Fictitious Payee Rule 3. Negotiations Subject to Rescission B. Indorsements 1. Blank […]

ANSWERS TO PROBLEMS 1. State whether the following provisions impair or preclude negotiability, the instrument in each instance being otherwise in proper form. Answer each statement with either “Negotiable” or “Nonnegotiable” and explain why. a. A note for $2,000 payable […]

Part Five: Negotiable Instruments CONTENTS Chapter 26 Form and Content Chapter 27 Transfer and Holder in Due Course Chapter 28 Liability of Parties Chapter 29 Bank Deposits, Collections, and Funds Transfers ETHICS QUESTIONS RAISED IN THIS PART 1. Should a […]

14. Through information provided by S-2 Yachts, Inc., the plaintiff, Barr, located a yacht to his liking at the Crow’s Nest marina and yacht sales company. When Barr asked the price, he was told that, although the yacht normally sold […]

ANSWERS TO QUESTIONS 1. Mae contracted to sell one thousand bushels of wheat to Lloyd at $5.00 per bushel. Just before Mae was to deliver the wheat, Lloyd notified her that he would not receive or accept the wheat. Mae […]

CASE 25-3 MIDWEST HATCHERY v. DOORENBOS POULTRY Court of Appeals of Iowa, 2010 783 N.W.2D 56 http://scholar.google.com/scholar_case? q=783+N.W.2d+56&hl=en&as_sdt=2,34&case=17039907567362199216&scilh=0 Zimmer, S.J. Doorenbos Poultry, Inc., is a company that keeps chickens for egg production, and sells the eggs. The company conducts its […]

Chapter 25 SALES REMEDIES A. Remedies of the Seller 1. To Withhold Delivery of the Goods 2. To Stop Delivery of the Goods 3. To Identify Goods to the Contract 4. To Resell the Goods and Recover Damages 5. To […]

17. Mrs. Embs went into Stamper’s Cash Market to buy soft drinks for her children. She had removed five bottles from an upright soft drink cooler, placed them in a carton, and turned to move away from the display when […]

ANSWERS TO PROBLEMS 1. At the start of the social season, Aunt Lavinia purchased a hula skirt in Sadie’s dress shop. The salesperson told her, “This superior garment will do things for a person.” Aunt Lavinia’s houseguest, her niece, Florabelle, […]

II. STRICT LIABILITY IN TORT Section 402A of the Restatement, Second, of Torts imposes strict liability in tort on merchant sellers for both personal injuries and property damage that result from selling a product in a defective condition, which makes […]

Chapter 24 PRODUCTS LIABILITY: WARRANTIES AND STRICT LIABILITY IN TORT I. Warranties A. Types of Warranties 1. Warranty of Title 2. Express Warranties a. Creation b. Basis of Bargain 3. Implied Warranties a. Merchantability b. Fitness for Particular Purpose B. […]

ANSWERS TO PROBLEMS 1 Stein, a mechanic, and Beal, a life insurance agent, entered into a written contract for the sale of Stein’s tractor to Beal for $6,800 cash. It was agreed that Stein would tune the motor on the […]

B. RISK OF LOSS Losses are borne by either the seller, the buyer or both when goods have been damaged, destroyed, or lost without the fault of either the seller or the buyer. If the loss is placed on the […]

Chapter 23 TRANSFER OF TITLE AND RISK OF LOSS A. Transfer of Title 1. Identification a. Insurable Interest b. Security Interest 2. Passage of Title a. Physical Movement of the Goods b. No Movement of the Goods 3. Power to […]

ANSWERS TO PROBLEMS 1. Tammie contracted with Kristine to manufacture, sell, and deliver to Kristine and put in running order a certain machine. After Tammie set up the machine and put it in running order, Kristine found it unsatisfactory and […]

*** Chapter Outcome *** Explain what constitutes acceptance by the buyer and the buyer’s right to revoke acceptance. Acceptance Acceptance of goods means a willingness by the buyer to become the owner of the goods tendered or delivered to him […]

Chapter 22 PERFORMANCE A. Performance by the Seller 1. Time and Manner of Tender 2. Place of Tender a. Shipment Contracts b. Destination Contracts c. Goods Held by Bailee 3. Perfect Tender Rule a. Agreement by the Parties b. Cure […]

ANSWERS TO PROBLEMS 1. Adams orders one thousand widgets at $5 per widget from International Widget to be delivered within sixty days. After the contract is consummated and signed, Adams requests that International deliver the widgets within thirty days rather […]

II. FORMATION OF SALES & LEASE CONTRACTS The Code will strive to recognize a contract if the intent of the parties is consistent with such a conclusion. *** Chapter Outcome *** Compare and contrast the manifestation of mutual assent under […]