Business Law and Legal Environment
Week Four: Chapter Questions
**Questions taken from the textbook: Business Law and the Legal Environment (Version 2.0) by Mayer, Warner, Siedel
Guidelines: All answers MUST be original and MUST be able to pass Turnitin.
Chapter 38 – Question #3 (pg. 1060)
A principal hired a mortgage banking firm to obtain a loan commitment of $10,000,000 from an insurance company for the construction of a shopping center. The firm was promised a fee of $50,000 for obtaining the commitment. The firm was successful in arranging for the loan, and the insurance company, without the principal’s knowledge, agreed to pay the firm a finder’s fee. The principal then refused to pay the firm the promised $50,000, and the firm brought suit to recover the fee. May the firm recover the fee? Why?
Chapter 39 - Question #3 (pg. 1085-1086)
Ralph owned a retail meat market. Ralph’s agent Sam, without authority but purporting to act on Ralph’s behalf, borrowed $7,500 from Ted. Although he never received the money, Ralph repaid $700 of the alleged loan and promised to repay the rest. If Sam had no author-ity to make the loan, is Ralph liable? Why?
Chapter 40 - Question #2 (pg. 1108)
The Havana Club operated in Salt Lake City under a lease running to defendant Dale Bowen, who owned the equipment, furnishings, and inventory. He did not himself work in operating the club. He made an oral agreement with Frances Cutler, who had been working for him as a bartender, that she take over the management of the club. She was to have the author-ity and the responsibility for the entire active management and operation: to purchase the supplies, pay the bills, keep the books, hire and fire employees, and do whatever else was necessary to run the business. As compensation, the arrangement was for a down-the-mid-dle split; each was to receive $300 per week plus one half of the net profits. This went on for four years until the city took over the building for a redevelopment project. The city offered Bowen $30,000 as compensation for loss of business while a new location was found for the club. Failing to find a suitable location, the parties decided to terminate the business. Bowen then contended he was entitled to the entire $30,000 as the owner, Cutler being an employee only. She sued to recover half as a partner. What was the result? Decide and dis-cuss.
Chapter 41 - Question #7 (pg. 1145)
Follis, Graham, and Hawthorne have a general partnership, each agreeing to split losses 20 percent, 20 percent, and 60 percent, respectively. While on partnership business, Follis neg-ligently crashes into a victim, causing $100,000 in damages. Follis declares bankruptcy, and the firm’s assets are inadequate to pay the damages. Graham says she is liable for only $20,000 of the obligation, as per the agreement. Is she correct?
Business Law and Legal Environment
From the case’s view, it is clear that the firm should recover the fee for various reasons. This could be when the banking firm agrees to grant a loan to the insurance firm, as indicated in the case. Another significant fact about the case is that in case the banking firm met the requirement, insurance had an agreement to pay $50,000. In most instances, a mortgage loan is essential to the firm because it helps the business partners and their companies boost their investment growth. Thus, there are numerous significant facts from the case, such as the banking firm paying the mortgage banker who may take assistance from another party, which is not required with the insurance firm. But also, from the case, it is fundamental that the insurance firm involved in acquiring the loan to construct the shopping center delivers its promises to the banker. From this view, it is clear that as business partners deliver what you have agreed on, stakeholders like bankers trust the services offered by insurance firms. Moreover, delivering on what you have promised leads to the fact that, as business partners in the entity, you are focused on ensuring that consumers are satisfied with your services.
It is fundamental from the provided information that Ralph was reliable though he did not receive the money. The information provided makes Ralph liable even though he did not receive money as he repaid $700 for the alleged loan that Sam took. This makes us think Ralph was liable for the loan because he accepted liability to repay the loan. After all, Sam was an agent of his business, and in the act of taking a loan, it can be viewed that he acted on his behavior. Thus, it is true that Ralph was liable to pay the loan because Sam, his business partner, and the loan he took was based on the interest of the owner who is Ralph. More importantly, any business owner is liable for loans depending on whether they were signed at the person or company level because it helps benefit significant business growth. If business partners have signed a written partnership agreement, each can be equally liable for an outstanding loan like the one indicated in the case. But the fact that Sam never benefitted from the loan, it is true that Ralph was liable because he repaid a certain amount of the total loan taken by Sam.
From the case view, it is clear that partnership in any business or company can be created informally. The informal partnership exists when two individuals enter a business arrangement to create profits. But in some instances, a business partnership can be formalized, meaning that partners in the organization should register their entity with the state. It is clear from the case that partnerships within the organization can be created informally without requiring any legally binding agreement among partners. But for the partnership to exist among business individuals, decision-making power, business operation characteristics, sharing profits, and co-ownership of business, among other factors. The informal partnership indicated in the case shows that partners in business like Bowen and Cutler have no written partnership, an indication that they are operating under the informal business partnership. Having looked at the five features of partnership highlighted above, it is fundamental that the relationship between Cutler and Bowen had four of the five features of a partnership. For instance, in the case, it has been indicated that Cutler was operating looking after operations of Havana club like an owner, thus indicating that she qualified as a partner. This was evident from the rule of the court, which indicates that she was eligible for compensation for the business because of being part of the club ownership. Therefore, from the information of the case, it is fundamental that business partnership is fundamental because it makes each one of the individuals within the organization to be liable.
Having analyzed the case effectively, it is clear that Graham is correct. This is because Follis caused $100000 in damages, and he was declared bankrupt. This is an indication that the damages caused by Follis and given that he is bankrupt will need the firm to pay for the total cost of damages from its account. In addition, looking at the business agreement between the two partners, it is evident that Graham is liable for 20 percent payment of any losses within the firm. Therefore, in this case, she will only pay $20000 for the damage within the company. This is because damages caused are $100000 and 20 percent of its total is $20000, which Graham will need to pay as the partner in the business. Therefore, in this case, it is fundamental that as partners within the business, you are jointly and severally liable for damages within the business.
Tough Essay Due? Hire Tough Essay Writers!
We have subject matter experts ready 24/7 to tackle your specific tasks and deliver them ON TIME, ready to hand in. Our writers have advanced degrees, and they know exactly what’s required to get you the best possible grade.