Issue: What are the rights of the parties in this case and what will be the eventual outcome if the bank decides to bring up before the court the corporation and the guarantor?
The guarantee given by the director is a personal guarantee, or as it is known as director’s guarantee, which is common practice by giving loans to companies. A personal guarantee is a promise that an individual gives to ensure the fulfillment of third party’s obligations or a promise that if the third party does not fulfill its obligations, the individual will do that instead. Unfortunately it does not end in case the individual’s position as a director ends. In the light of the said so far, it was Mr. Simple’s duty to rearrange his personal guarantee with the bank and the new corporation’s management. In the given situation his only chance is to object to the bank that rearranging the loan with the new management they were aware with his position’s suspension, but this is complicated issue even for highly qualified lawyers, so he can try to bring the rest of the shareholders to joint responsibility.
Issue: Rights and liabilities of the parties and what will be the decision of the court?
Under the Contract Law, a contract to be considered valid must have the following elements: offer, consideration, acceptance of the offer and mutuality. According to Article 2, section 204 (3) of the Uniform Commercial Code (UCC) “Even though one or more terms are left open a contract for sale does not fail for indefiniteness if the parties have intended to make a contract and there is a reasonably certain basis for giving an appropriate remedy.“ (UCC, 1952, n. p.) What of the elements are available in the case, cited above? There is an offer with quantity and price and there is an acceptance of about a month later. The character of the goods presumes that the price varies according to the market every day, so the offered price, according to the good commercial practice, should be considered fixed maximum for a week. Since the offer was not accepted in reasonable time for such kind of goods but on the other hand the price was fixed in the offer without giving a term of validity of the offer, it may be considered that there exists a valid contract between the parties with all following consequences of that fact.
References
Uniform Commercial Code, 1952, National Conference of Commissioners on Uniform State Laws and American Law Institute, Web Retrieved on Aug. 16, 2016 from https://www.law.cornell.edu/ucc/2/2-206
