Essay 7,9,10

Essay 7

CH 22 - Bankruptcy pp. 420-437 (note: p.433 has a great review).

CH 31 - Insurance pp. 593-609 

Please use bullet points if appropriate. For example, if a question asks for three things, use this format to answer - 

1. First point.

2. Second point.

3. Third point.

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Question #1 (5 points):

Max set up Max's Sandwich Shop as a sole proprietorship. He owes a total $400,000 to ten different creditors. His assets are down to $100,000 and he is losing money on the shop. He decides to file for bankruptcy.

1. In bullet point form, list the three main purposes (or specific goals) of the federal Bankruptcy Code and how these goals will impact Max and his creditors.

2. What are your thoughts on the Bankruptcy Code? What are the advantages and disadvantages of the Code? (There is no right answer to part 2. I want you to use your critical thinking.) 

Question #2 (5 points): 

Leah has filed for bankruptcy under Chapter 13.

1. Which group or individual has the authority to confirm or reject her plan of payment; and

2. List in bullet point form, the factors that the court will consider when deciding whether to approve her repayment plan.

3. What are the advantages and disadvantages of Chapter 13 for Leah?

Question #3 (5 points):

Insurance policies often contain a covenant of good faith and fair dealing. Even if the clause is not in the policy, often courts will imply it.

1. List in bullet point form, the ways that an insurer may violate this covenant; and

2. Provide a fact situation for each way that illustrates how an insurance company might breach this covenant (do NOT use those already in the text).

3. Have you, or a friend or family member, ever had dealings with an insurer? Explain the situation. Did they comply with the covenant?

Essay 9

CH 12 - Performance of a Contract pp. 220-241 CH 13 - Practical Contracts pp. 242-260

Question #1 (5 points):

Allison contracts with AME, Inc., a Fortune 100 company, to give a motivational talk to their multi-national sales force. The talk is to take place at a first-class resort on the island of Aruba in January. AME decides they want a different speaker and assigns Allison's contract to TTT Corporation, a small start-up, to give a sales training talk at its home office in Duluth, Minnesota, also in January.

Can Allison successfully prevent this assignment? If so, how? What factors will come into play if Allison decided to sue AME? What are the key facts in this situation? What would you think if you were Allison?

Question #2 (5 points): 

For your business, you've done the wise thing and hired an experienced small business attorney to help guide you in the growth of your business.

1. What should be the primary goal of your counsel in the negotiation of the deal?

2. State five ways that your legal counsel should serve you in the negotiation of the deal.

Note: I want you to read the text and listen to the lectures and answer based upon what is discussed there.

Question #3 (5 points):

Review the page -  Typical Contract Provisions .

1. List five representations and warranties that should be considered when drafting a contract.

2. What do you think would be the three most important provisions in contracts for your project business? Why? (Remind me of your business idea.) 

Essay 10

CH 14 - Sales  pp. 261-277

CH 15 - Negotiable Instruments pp. 278-294

CH 16 - Secured Transactions pp. 295-314

Question #1 (5 points): 

JoJo Parachutes is seeking to buy silk from Ivory Road Limited. List and explain the basic and other principles of contract formation they will want to follow under UCC Article 2, including the writing and enforceability requirements, and how they will handle additional and different terms. Do not worry about the merchant exception here.

Question #2 (5 points): 

Andrew Enterprises received a promissory note from J&J Limited. List (in bullet points) the six things Andrew will look for to determine if the note is negotiable? Explain why each of these requirements are necessary.

Question #3 (5 points): 

Hometown Bank has loaned $1,000,000 to AquaTaste to purify, bottle, and market store-bought drinking water from the Ohio River. AquaTaste has put up its purification equipment as collateral. If you were the loan officer for Hometown, how would you go about protecting the Bank's investment using Article 9 of the UCC? Hint: there are two main steps, with three substeps to the first step and three ways to perform the second step.