Outline I. General Facts a. Jennifer, William’s wife, has a friend Thomas who is a promoter for a corporation dealing with e-learning services that is in the process of incorporating and needs a real estate agent to purchase assets for which Jennifer has agreed to do. b. Jennifer found a property and was able to have the seller and the buyer sign all the necessary paper work for the contract to be sent off to be closed. i. The conditions of the closing were that there was no deposit to be paid but that a special clause was to be included. c.
When the closing date arrived, Thomas, representing his un-incorporated business, did not have the funds. II. Facts relevant to legal issue a. The buyer was not able to fulfill the contract. b. The contract – The clause – Any failure to close within 2 days of the stated closing date shall be deemed a breach of contract. Legal action against the buyer will ensue thereafter. However, if the buyer pays a non-refundable deposit of $2,000, legal action will not be taken, in lieu of retention of the $2,000. c. The seller threatens legal action against all parties. III.
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Legal issue a. The buyer and the seller were signed into a contract where the buyer was to pay a deposit of $2000 instead of a down payment, but the contract would have to be closed within 2 days of the stated closing date. b. The buyer was not able to come up with the funds to purchase the asset nor did he have the funds to pay for the $2000 deposit. c. The legal issue arises on whether the seller has the right to take legal action and succeed in gaining any monetary compensation from Thomas, the promoter, or the business which has not been incorporated yet.
Does Thomas have any liability toward the transaction? IV. Laws a. Pg. 334 of the “Business Law” textbook, “In the course of forming the corporation, the promoter may incur costs, make contracts, and do other acts in furtherance of the corporation. Since the promoter is not an agent, the corporation is not automatically responsible or liable for these obligations and contracts. ” b. Pg. 8 of the Lecture notes, “Because the corporation is technically not in existence at the time the promoter engages in all of these activities, the corporation is not required to compensate the promoter.
Similarly, since the corporation is not in existence, any contracts entered into by the promoter with third parties on behalf of the corporation that is to be formed, do not bind the corporation, even after it is formed. ” “Second, if the promoter enters into a contract solely in the name of the to-be-formed corporation, solely on the corporation’s credit, and the other contracting party knows that the corporation is not yet in existence, the promoter can avoid personal liability on the contract once the corporation is, in fact, formed. ” V.
Application of facts to laws a. From the Business Law Textbook, Thomas has no liability or is obligated to the contract because he is a promoter and not an agent. b. From The Lecture notes, Thomas was able to initiate deals but since the corporation was not yet incorporated then it does not bind and again he himself is not liable when the corporation is, in fact, formed. VI. Conclusion a. Judging by the facts, Thomas is safe and is not liable for the deal that he had signed since the corporation was not yet formed. VII. Facts relevant to ethical issue . Mark, a college friend of William, one day asked William if there were any positions available at the company that William currently enjoys working for. b. ERU, the company that William works for, has a code of ethics that it strongly recommends its employees to follow in and outside of work in order to better represent the image of the company. c. William, wanting to be a good friend, does what he can and gives a letter of recommendation, cover letter and resume personally to his supervisor for possible consideration. d.
William and Mark celebrate the news that Mark had been accepted and information is inadvertently exposed about Mark’s unethical habits such as drinking, partying and using insider information for personal gain. e. William stumbles upon Marks application and notices that the section asking if you have ever been arrested was not filled out. VIII. Ethical issue a. The ethical issue is whether William should inform his supervisor about Mark’s behavior and application mishap. IX. Analysis a. Know your facts i. Mark’s unethical behavior, lying on the application. . State the issue i. Should William tell his boss? c. Analyze and support i. Utilitarianism ??? “Ethical choices that offer the greatest good for greatest number of people” (Ethics Textbook, pg. 8) ii. It benefits more stakeholders if he tells iii. None of the things that were spilled to William by Mark that night could make a good impression of him nor will it benefit the company as stated in the company’s code of ethics. d. Answer with logic i. He should tell his supervisor before Mark officially begins work. ii.
Effects 1. Personal life ??? William/Mark relationship 2. William’s relationship with his supervisor 3. Mark’s potential relationship with his co-workers 4. The company’s image in and out of the workplace X. Conclusion/recommendation a. I recommend for William to tell his supervisor about the information that he learned about Mark at the pub in order to save himself from humiliation as well as the time and efforts lost by the company for bringing in an employee who is not ethically fit to work for the company. b.
I had a personal incident very similar to this case in which I recommended a friend to work at my current workplace that I haven’t seen in a couple years. I originally remembered him being a genuine person. My supervisor took my words of consideration to heart and offered the position to my friend. Within the week timeframe before he started, I uncovered information from another friend that he had been fired from his other job due to stealing which is a big deal. I immediately informed by supervisor and he took corrective action for the greater good of the company to not let that type of person into our work environment.