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Business Law and the Regulation of Business 11th Edition by Richard Mann, Barry Roberts
Edition 11ISBN: 978-1133587576Business Law and the Regulation of Business 11th Edition by Richard Mann, Barry Roberts
Edition 11ISBN: 978-1133587576 Exercise 28
What Responsibility Does a Holder Have in Negotiating Commercial Paper?
FACTS Marcus Moore and David Arnold are subcontractors specializing in the installation of electrical wiring for commercial office space. They have incorporated their business as Moore Arnold, Inc. Over the last two years, their business has been extremely slow. Recently, they obtained an offer to install wiring for a general contractor, Barnes Sons, which was in charge of renovating an office to be occupied by three major tenants. The jobwas substantial andwould pay $135,000.
Marcus and David disagreed on whether to accept the job. Marcus was concerned with the business reputation of Barnes Sons. For years, the business had been reputably operated by Tom Barnes, the original owner, but when his son, John, assumed control of operations, problems began. The partnership was recently sued for negligence in connection with a major construction project in a mall. It is well known that John is a gambler, and the business has gained the reputation of being slow to pay creditors.
Marcus and David finally decided to accept the job. Upon their completing the work, John Barnes handed Marcus a negotiable promissory note drawn by John Major, one of three different names Barnes Sons has been trading under during the last year. The note was payable to Moore Arnold, Inc., one month from date.
Marcus is instinctively nervous about accepting the note. He is aware of the cash flow problems and the litigation pending against Barnes Sons and has become increasingly suspicious because of the different trade names the contractor uses. David, who is more trusting, wants to accept the note and negotiate it to Wire Ways, Inc., one of their major suppliers of electrical wiring. Marcus wants to demand cash and, if Barnes refuses, to refer the account to a collection agency.
Social, Policy, and Ethical Considerations
What ethical responsibilities does one have to review the business reputations of prospective clients or customers and to refuse to do business with disreputable persons?
FACTS Marcus Moore and David Arnold are subcontractors specializing in the installation of electrical wiring for commercial office space. They have incorporated their business as Moore Arnold, Inc. Over the last two years, their business has been extremely slow. Recently, they obtained an offer to install wiring for a general contractor, Barnes Sons, which was in charge of renovating an office to be occupied by three major tenants. The jobwas substantial andwould pay $135,000.
Marcus and David disagreed on whether to accept the job. Marcus was concerned with the business reputation of Barnes Sons. For years, the business had been reputably operated by Tom Barnes, the original owner, but when his son, John, assumed control of operations, problems began. The partnership was recently sued for negligence in connection with a major construction project in a mall. It is well known that John is a gambler, and the business has gained the reputation of being slow to pay creditors.
Marcus and David finally decided to accept the job. Upon their completing the work, John Barnes handed Marcus a negotiable promissory note drawn by John Major, one of three different names Barnes Sons has been trading under during the last year. The note was payable to Moore Arnold, Inc., one month from date.
Marcus is instinctively nervous about accepting the note. He is aware of the cash flow problems and the litigation pending against Barnes Sons and has become increasingly suspicious because of the different trade names the contractor uses. David, who is more trusting, wants to accept the note and negotiate it to Wire Ways, Inc., one of their major suppliers of electrical wiring. Marcus wants to demand cash and, if Barnes refuses, to refer the account to a collection agency.
Social, Policy, and Ethical Considerations
What ethical responsibilities does one have to review the business reputations of prospective clients or customers and to refuse to do business with disreputable persons?
Explanation
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Case summary:
MM and DA are specialist ...
Business Law and the Regulation of Business 11th Edition by Richard Mann, Barry Roberts
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