Cengage Advantage Books: Business Law 9th Edition by Arnold Goldman ,William Sigismond

Exercise 17

Adams, an attorney, represented Hall, who called himself an International Trader, in a deal with a company in India that was to result in Hall receiving $10 million. Adams and Hall resided in the state of Maine. The attorney's fee of $1 million for handling the case was to be paid when Hall received his money from the company. In order to receive this $10 million, however, Hall was required to pay an upfront fee of $100,000 to an agent of the company handling the deal in India. Hall had done business with this Indian company on prior occasions, but the agent was new to the company. Hall borrowed the fee from Garlock, a business associate, and signed a promissory note agreeing to pay back the $100,000 within five days. Adams made arrangements with a local bank to wire the money to the agent in India. Neither Hall nor Adams heard from the agent once the money was sent. Adams had orally guaranteed to repay Garlock if Hall did not himself repay the debt. When the due date of the note arrived, Garlock requested his $100,000, but Hall was unable to make payment. Garlock therefore brought a lawsuit against Hall for the money. He hired Adams as his attorney. The court awarded damages to Garlock requiring Hall to make payment. However, Hall had no assets from which to collect it. During the trial, Adams publicly reprimanded Hall during cross-examination for not paying his loan as scheduled.
Questions
1. Has Adams, as the attorney, acted unethically in this case?
2. I s Adams legally obligated to pay Garlock the $100,000 that Hall borrowed from him?