Reference no: EM131699876

Adam and Betty were life-long friends. When they were 12, they made a pact that if they both were not married by the time they were 30, they would marry each other. When they turned 30, Adam tried to convince Betty to marry him based on the pact, but she refused.

Instead of suing Betty and ruining their friendship, Adam decided to do the next best thing; start a business with Betty. The business was providing educational services to other businesses on tax laws, financial regulations, and the like. There was nothing in writing, but whatever the business made above their monthly bills was split evenly, and whenever they had a month that their income was less than their bills, they each wrote equal checks to cover the losses.

One day their office building flooded, and rendered it completely unusable for the business. Their landlord told them they needed to keep paying rent but that the landlord would not require utilities to be paid during the time that the building was not able to be occupied.

The condition of the building forced Adam and Betty to each work out of their cars. Even though they had informally agreed to only offer their services in the city of Centerville, one day Adam travelled to nearby Suburbia to offer some consulting services to an old college buddy's company. The company liked Adam so much that they offered him a contract (Apparent Authority) to do the consulting on a monthly basis for a year. On the way back to Centerville, Adam was being followed by a semi that was riding Adam's bumper and shining its high beam lights into Adam's rear window. Since Adam was basically blinded by the vehicle behind him, he crossed the center line and caused a head-on collission injuring the driver of the other vehicle. The driver later sued both Adam and Betty, even though Betty didn't know about the trip.

Adam was also seriously injured, and was unable to fulfill his obligations to his buddy's company that they had signed a contract for before the accident. Out of the blue one day Betty received a call asking her why she wasn't in Suburdia performing the consulting services on behalf of Adam and their business. She didn't think she had the obligation to perform these services since Adam never told her about the contract, but since she wasn't that busy she quickly put an educational packet together(Ratification) for the company and drove over to Suburbia to perform the training. The packet mostly consisted of articles from the Wall Street Journal and Ingram's.

Because Adam was in the hospital for a few months, the business began to suffer financially. As a result Betty was having a hard time paying her personal bills. She decided she would sell one of the cars that was titled to the consulting business so that she could have some funds to make her house payment and keep the cable connected.

When Adam got out of the hospital, he learned of the drastic condition of the company. He had several collection notices from both personal creditors as well as creditors of the business waiting on him at home. He went to the movies to try to relax but unfortuantely he picked a movie about a guy whose business was going bankrupt. This caused Adam to have a panic attack and he ended up yelling in the middle of the movie, "I'm so fed up with this that I'm going to strangle any banker in this place." (Assault) Despite his protestations that he can say whatever he wants as an American, he was promptly taken to jail.

While in jail, he tried to work a favorable deal for himself with the prosecutor and relayed a story about Betty and the business that he had previously forgotten. He told the prosecutor`1 that Betty hadn't paid witholding taxes on the businesses' receiptionist's pay for months in hopes that this information could serve as a trade for leniency on his criminal charge. When Betty found out that Adam had leaked this information, she promptly fired the receptionist for telling Adam about the witholding taxes (The receptionist was being a whistleblower). She then left the country never to be heard from again.