Reference no: EM133193852

Question 1. Paul wants to buy a car from Tanya, but Paul does not want to deal with Tanya himself. He asks his friend Adam if he will go buy the car for him and Adam agrees. Adam goes to Tanya tells her he is buying the car for Paul and offers $400 for the car (the same amount Paul had told him to offer). Tanya accepts the offer."

"A. Is this a binding contract even though Paul never spoke with Tanya?"

"B. What if Paul changed his mind and decided not to buy the car, what could Tanya do and who could she do it against?"

"C. For this part only, what if Paul was 14 years old, does this change anything?"

"D. For this part only, what if Adam was 14 years old does this change anything?"

Question 2. Pamella hires Amy to sell her Manhattan Condo and pays her an upfront fee of $10,000. Pamella tells her she does not care who buys it, but she wants no less than $1 million for it. Amy knows the real estate market and knows the Condo would sell for $2 million easily. Amy speaks with Tom who convinces her to sell it to him for $1.2 million and he tells her he will also give her personally $300,000. Tom says this way everybody wins, Pamella gets more than the $1 million she mentioned, Amy gets an extra $300,000 and he gets a $2 million Condo for $1.5 million. Pamella is only told that Amy found a purchaser for $1.2 million."

"A. Is there anything wrong with what Amy did, if so explain all of her errors."

"B. If Amy did something wrong is there anything Pamella could do? (i.e. what are the consequences) Mention all of the possibilities."

Question 3. Pamella owns a construction company and she needs to hire at least one person to help her build a new home. Pamella hires Allan. Unfortunately, Pamella did not pay attention when hiring Allan and did not notice he seemed to have been partially drunk at 9:00 A.M. By Noon Allan had continued drinking and was not paying attention to his work at all and no one else was paying attention either. Allan had taken his tool box up to the second floor of the new home and was working on the outside wall when he carelessly knocked the toolbox off the ladder causing it to fall on the head of Theresa who was walking by on the sidewalk. Theresa is seriously injured and is taken to the hospital."

"A. If Theresa wanted to use respondeat superior to sue Pamella would that work, explain fully."

"B. Is there any other way Theresa could sue Pamella, explain fully."

"C. Is there any other way Theresea could recover for her injuries?"

Question 4. Sam learned that Adams, Boone, and Chase were planning to form a corporation for the purpose of manufacturing and marketing a line of novelties to wholesale outlets. Sam had patented a self-locking gas tank cap but lacked the financial backing to market it profitably. He negotiated with Adams, Boone, and Chase, who agreed to purchase the patent rights for $5,000 in cash and 200 shares of $100 par value preferred stock in a corporation to be formed.

The corporation was formed and Sam's stock issued to him, but the corporation has refused to make the cash payment. It has also refused to declare dividends, although the business has been very profitable because of Sam's patent and has a substantial earned surplus with a large cash balance on hand. It is selling the remainder of the originally authorized issue of preferred shares, ignoring Sam's demand to purchase a proportionate number of these shares."

"A. What are Sam's rights, in relation to the $5,000 and why?"

"B. What are Sam's rights, in relation to his demand to buy a proportionate number of new shares and why?"

"C. What are Sam's rights, in relation to his dividends, if any and why?"

Question 5. Patrick hires Alex to build his house. Patrick tells Alex he wants it made entirely out of wood and tells him where the local lumber store is located. Alex goes to the lumber store and uses Patrick's account to buy three tons of Oak wood to begin the construction. Patrick had never told Alex to use his account and never told the store to allow him to use the account, but it was well known in the area that Alex had been hired to build the house because Patrick had been telling everybody."

"A. Did Alex have the authority to buy the lumber, if so how?"

"B. What if Patrick had told Alex not to use "Oak wood" does this change the possible consequence, if so how, if not why not?"

"C. Would there be any effect if after the first ton of wood had been used Patrick looked at the Oak wood he had said not to buy, thought it looked good and did not say anything before the other two tons were used?"

Question 6. Tom is a sharehholder in Acme Corp. he has 1,000 common shares. Judy is also a shareholder in Acme Corp. she has 1,000, $10.00 preferred shares. Kristi is also a shareholder she has 1,000, $10.00 preferred, cumulative shares in Acme Corp. Ed is also a shareholder, he has 1,000, $10.00 preferred, cumulative, participating, shares in Acme Corp., The company went through a difficult first four years and lost money every year and could not give dividends. Fortunately, the company had an amazing 5th year and ended the year with a $120,000 surplus. Acme wants to give it's four shareholders an equal division of $30 .00 per share to everybody."

"A. Can they do this? Why or why not?"

"B. If they cannot do this what is the maximum amount each shareholder (Tom, Judy, Kristi and Ed) could be given?"

Question 7. Ed, Tony and Lloyd are starting a new business. They do not have a lot of money to start, but they think they have a good idea that may become a nation wide business. Tony is the only one with significant personal assets and he is worried about being sued."

"A. What factors should they consider when choosing a business form?"

"B. What are the advantages and disadvantages if they form a corporation?"

"C. What are the advantages and disadvantages if they form a partnership?"