Assignment # 3
1. John gave Mary a postdated check to be cashed on January 1, 2014. Mary needs the money today December 14. Can Mary cash the check before the new year? Can the bank cash the postdated check before its date? When would the bank be liable for giving the money to Mary on the 14th of December instead of in 2014? Explain.
2. John made a promissory note by writing the promise on a watermelon. Is that a valid promissory note? Why?
3. John signed a check for Paul by drawing a picture of Spiderman. Should John accept the check or throw it in the trash as a bad joke? Why?
4. John wrote a promissory note promising to pay Mary 30 cows and one baby goat. Is that a valid promissory note? Explain.
1. John designated Mary as his agent. John is not paying Mary to be his agent. What kind of agency is this? If Mary breaches the fiduciary duty owed to John can Mary defend herself by saying that she was not paid a dime to do a lot of work and that it is not fair to hold her liable? Is that a valid defense? Explain.
2. John is working with Bob and Mary in a bike shop. John shares the control of the business and the profits. What is the legal status of John?
1. What is the most common form of business associations in the US?
2. Which form of business association is responsible for most of the wealth creation in the country?
3. Name three factors to be considered in choosing a business association form/
Chapter 34 Corporations
1. Are shareholders personally responsible for the debts and obligations of the corporations? Why?
2. A forms a corporation and leaves it with no assets. He signs contracts in the corporation’s name with a number of customers. A decides it’s easier just to keep the money from the customers and not do the work agreed on. Is A personally liable to the customers? What do the customers need to allege to get a judge to hold A personally liable to the customers? What do we call the court’s disregarding of the corporate entity?
1. What risk do the owners of a closely held corporation take when they disregard the corporate formalities?
2. What is the difference between direct suits and derivative suits?
3. What should one do before agreeing to serve on the board of directors? Why?
4. Who are outside directors, inside directors? Which are better for the corporation? Why?
5. What is the business judgment rule?
1. John wants to file for bankruptcy. What options does he have? What is the difference between these options?
2. Jane files for bankruptcy. John is owed $50 by Jane. Jane tells John that she has filed for bankruptcy two days ago but John insists that he gets his $50 back. Is John’s behavior in violation of the law? Why?
3. Are student loans dischargeable? Explain.
4. Paul owes a debt of $250,000 arising from a judgment resulting from a drunken driving accident that disabled a mother of four. Is this debt dischargeable in bankruptcy? Why?
5. A wants to file for bankruptcy. He owns a house in the Hamptons worth $400,000. To make sure the creditors don’t take it, a year before filing he put the house in his mother’s name. What kind of transfer is this? What is the actual intent of this transfer? What can the trustee do?
6. Which bankruptcy filing allows individuals to adjust their debts? What happens if the debtor fails to make the payments under the repayment plan?
1. A files a claim of discrimination on the basis of race against her employer with the EEOC. The employer learns of the charge and assigns A to do less desirable tasks and cuts her hours. What additional charge can A levy against her employer?
2. Name three protected statuses under federal law?
3. What is sexual harassment? What are the two types of sexual harassment?
4. Which doctrine allows, in the absence of a contract, an employee to quit for any reason and an employer to terminate employment of an employee at any time and for any reason?
5. A works in a Ford plant. A injures herself while attempting to place a fender on a Ford pickup truck. What relief does A have? What is the basis of recovery?
6. Mary works for Bob the attorney. Bob thinks he is a funny guy. Mary ends down to get a file from the bottom drawer of the filing cabinet and Bob whistles and says “Baby this is an awesome booty. You are so bootylicious.” Is this sexual harassment? What should Mary do? Explain.
1. What are the legal bases for an accountant’s legal responsibility?
2. What does SOX prohibit accounting firms from as to their audit clients?
1. What is the Fair Debt Collection Practices Act? What does it prohibit?
1. What is the difference between a bribe and grease payment?
2. Do American companies have to comply with American anti-discrimination laws when operating overseas? When are they not required to?
1. What does it mean to say that someone died “intestate”?
2. What happens to a person’s assets if they die without leaving a will?
3. John’s uncle writes his will leaving his nephew Bob his cottage. Bob thinks that he does not have to be nice to his uncle anymore since he is set and receives the cottage in the will. Is Bob right? What is the risk that Bob is talking? Explain.