Smith and Roberson’s Business Law
17th Edition
ISBN: 9781337094757
Author: Richard A. Mann, Barry S. Roberts
Publisher: Cengage Learning
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Rafferty was the principal shareholder in Continental Corporation, and, as a result, he received the lion’s share of Continental’s dividends. Continental Corporation was eager to close an important deal for iron ore products to use in its business. A written contract was on the desk of Stage Corporation for the sale of the iron ore to Continental. Stage Corporation, however, was cautious about signing the contract; and it did not sign until Rafferty called Stage Corporation on the telephone and stated that if Continental Corporation did not pay for the ore, he would. Business reversals struck Continental Corporation, and it failed. Stage Corporation sues Rafferty. What defense, if any, has Rafferty?
David E. Ross, his two brothers, and their families operated and owned the entire stock of five businesses. Ross had three children: Rod, David II, and Betsy. David II and Betsy were not involved in the operation of the companies, but Rod began working for one of the firms, Equitable Life and Casualty Insurance Company, in 2007. Between 2009 and 2013, the elder Ross informed a number of persons of his desire to reward Rod for his work with Equitable Life by giving him stock in addition to the stock he would inherit. He subsequently executed several stock transfers to Rod, representing shares in various family businesses, which were reflected by appropriate entries on the corporate books. Certificates were issued in Rod’s name and placed in an envelope identified with the name Rod Ross, but they were kept with the other family stock certificates in an office safe to which Rod did not have access. In all, one-fourth of the stock holdings of David E. Ross were transferred to Rod in this…
An agent is NOT personally liable on a contract made with a third party when:
1)
neither the existence, nor the name of the principal is known to the third party.
2)
the name and existence of the principal are known to the third party.
3)
the agent makes the contract with the third party in his/her personal capacity as a co-signor or obligor with the principal.
4)
the existence, but not the name of the principal is known to the third party.
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