Business Law Quiz
Betty hires Peggy and Jiang to be her assistant managers at Bicycle Fish and tells them to receive and sign for various deliveries of new merchandise. Betty notifies her wholesale supplier that Peggy will be accepting merchandise, but forgets to tell them about Jiang. On Monday, Peggy accepts a defective shipment of lava lamps. On Tuesday, Jiang accepts a defective shipment of water-cooled, tobacco-only smoking devices (bongs). On Wednesday, Betty discovers the defects, and wants to reject both shipments. Can she?
a) Yes, as to the lava lamps
b) Yes, as to the bongs
c) Yes, as to both lamps and bongs
d) No
Harry owns Popular Foods and Lively Potations (PFLP), holding ownership as a sole proprietor. Harry purchases inventory from George Habash for $50,000 on credit, and he borrows $50,000 from Gotham Bank. The business fails, and Harry owes George $30,000 and he owes the bank $40,000. Harry owns his house ($300,000) but only has $10,000 in his business operating account. What can the bank collect from Harry?
a) $0 (limited liability)
b) $10,000 (entire operating account)
c) $40,000 (entire outstanding debt)
d) $50,000 (entire initial debt)
