Business Law 2 Group Problem
Written Assignment 3
BULGL 319 Summer, 2013
10 points
Keaton accepted Maxwell’s promissory note for $150. Keaton then changed the amount on the note to $1500 and negotiated it to Dixon, a HDC. When the note matured, Dixon properly presented the note to Maxwell for payment, but Maxwell refused to pay.
Was Maxwell liable to Dixon for $1500?
Was Maxwell liable to Dixon for anything?
2. Green found a piece of paper on which Carey’s signature was written and wrote a promissory note above the signature. Green indorsed the note to Friedman, a HDC. Can Friedman recover from Cary? Why or why not?
3. Metzler made a note payable to Lokken, her attorney. Because of a dispute over the amount actually owed, Metzler never gave Lokken the note. On a visit to Metzler’s office, Lokken saw the note and took it. Lokken then negotiated the note to Cohen, a holder in due course. Can Cohen collect from Metzler? Why or why not?
4. Monroe made a note payable to Barnard for $1000, which had a due date of December 1, 2016. Monroe did not pay Barnard when the note was due. Since Barnard needed money he indorsed the note and sold it to J.G. Wentworth Financial Company on December 3, 2016.
At this point Monroe discovered that he had a defense of fraud in the inducement against Barnard.
Is J.G. Wentworth a holder in due course?
Will the defense of fraud in the inducement be effective against J.G. Wentworth?
5. On September 1, 2016, Franklin signed a contract and a promissory note in the amount of $9000, due on February 15, 2017, to the Fly- By- Night Siding Company for the installation of new siding on Franklin’s home. Fly- By -Night immediately negotiated the note to the Cordial Finance Company.
Franklin patiently waited for siding to be installed, but none was forthcoming. Despite repeated calls to Fly –By- Night, which went unanswered, Franklin never received siding on her home.
On February 24, 2017, Cordial Finance company presented the note to Franklin and demanded payment.
Follow the Flow chart, work yourselves through this, and decide: Does Franklin have to pay? Why or why not?
