Jill used to be Jack’s lawyer. Jack and Jill had dinner and drinks together to celebrate Jack’s 17th birthday. Jill showed Jack pictures of her new car and asked him if he wanted to buy the car for $20,000.00. He agreed with one small change. Jack wanted the car professionally cleaned before delivery. Jill said yes but only if he paid her in cash. Jack said I’ll think about it and waited another two weeks to tell Jill. “o.k.” I will do your deal”. Jack has been very depressed. There is not formal contract just a note signed by Jack which says “20 for car”. A few days later Jack changes his mind and tells Jill he doesn’t want to by the car. Jill is upset because two days earlier she turned down an offer from Bob to buy the car for $25,000.00. What legal issues, rules of law or defenses can you identify? How would you advise Jack? How would you advise Jill?
Li, Shu and Lin have an idea for a computer export business. They employ six (6) people. Li doesn’t draw a salary but works 50 hours a week for the business. Li tells Shu and Lin that she will prepare and file articles of organization and other corporate documents necessary to register their business name and incorporate in Massachusetts. Their business makes a profit of $8,000,000.00 in the first 12 months of operation. Shu is busy with other activities and spends no time working for the business. Lin wants to leave the business and cash out. Li who has been working 50 hours a week for the business says no to both of them — she wants to continue with the business venture and bring in a new owner Zhu.
Li goes ahead and starts working with Zhu. A year later annual profits are up to $10,000,000.00
Shu and Lin hire a lawyer and sue Li.
Shu’s lawyer discovers that Li has received but has not yet paid for a $100,000.00 computer delivery she has ordered and received without Shu or Lin’s knowledge. Li still has in her handbag, but has never filed, any legal documents for the business.
What form of business if any do they have together? What are Li’s rights? Shu’s rights? Lin’s rights? Zhu’s rights? What are each of their potential liabilities? What other legal issues and applicable cases, statues or rules of law we have studied are applicable?
Question 1 is a brief fact pattern which will allow you to demonstrate your understanding of and ability to apply the rules of contract law: formation, defense to formation, performance, breach and damages.
Question 2 is a brief fact pattern which will allow you to demonstrate your understanding of and ability to apply the rules of business organizations law.
Tips: Use correct legal terms. Define every legal term you use. Do not limit your answers to conclusions. Explain all of your answers using rules of law we have discussed and studied. Support all of your answers and conclusions with detailed explanations of the rules of law.