Read the following cases and answer the questions that follow. Answers should be numbered accordingly, demonstrate critical thinking and concepts from the course, have supporting facts, use proper grammar, spelling and punctuation and adhere to APA guidelines. Any outside sources must be cited and referenced. This assignment should be at least two pages of content.
Case #1
David had five bank accounts spread over four banks. Each morning, he directed his assistant, Maureen, to call all of the banks and obtain balance information. He would then direct her to write checks transferring funds in each account to another account. Is there any problem with this practice?
Case #2
Kay signed a promissory note for $220,000 that was payable to Investments, Inc. The company then indorsed the note over to its lawyers to pay past and future legal fees. Were the lawyers holders in due course?
Case #3
A boat manufacturer incorporated under the name “Glasco, Inc.,” but operated its business solely under the name “Elite Boats, Division of Glasco, Inc.” When Citizens Bank agreed to finance Glasco’s marine engines, it filed a UCC-1 financ-ing statement listing the debtor as “Elite Boats, Division of Glasco, Inc.” Glasco later filed for bankruptcy. Since the financing statement only listed Glasco’s trade name, it did not come up on the bankruptcy trustee’s search. The trustee sold the engines to a third party. The bank sued the trustee for the proceeds of the sale, arguing the financing statement was adequate. What result?
Case #4
Having heard that it was a profitable new business, Smith decided to breed emus. They are flightless birds that reproduce rapidly and provide high-quality meat. For $4,000, Penbridge Farms sold Smith a “proven breeder pair,” guaranteeing that the lovebirds had already bred together. When the birds failed to mate, Smith discovered that they were both male. Penbridge refused to return Smith’s money. Smith sued, asking the court for direct as well as incidental and consequential damages. The evidence suggested that Smith stood to make $100,000 from one season’s chicks. To what kind of damages is Smith entitled? Will he recover lost profits?
Case #5
After learning more about implied warranties and disclaimers, would you ever buy an item sold “as is”? Imagine a car salesman who offers you a car for $8,000, but who also says that he can knock the price down to $6,500 if you buy the car “as is.” If you live in a state that does not give consumers special protections, which deal would be more appealing?
