Business Law Research Paper

Law

Business Law.

.

March 21, 2005
Every year business and individuals file for bankruptcy it has almost become common practice to do so. Bankruptcy is a legal procedure that begins when an individual or business that can't pay their debts to creditors. Sadly enough, there were as many bankruptcy cases filed in federal courts, as there were all other cases. The American bankruptcy law almost encourages debtors who are unable to pay their debts to file for bankruptcy. Is filing bankruptcy a good thing or a bad thing?

Bankruptcy law allows for business to continue operating depending on what chapter of bankruptcy they file for and how far in debt they are in. Businesses have to consider want chapter to file under chapter 7 or
chapter 11. Most times business file bankruptcy to find a way to become more profitable again. Under Chapter 7 liquidation takes place, and the company goes out of business and under chapter 11, reorganization takes place. "The process of starting a claim starts when a bankruptcy petition is filed and then an estate is created. An estate is all the debtors' current assets." "A trustee is appointed to administer the assets during a straight line bankruptcy." The trustee's job is to liquidate the estate, and any money received goes to secured creditors first."(To the extent of their collateral") (Bagley, Constance E. 2002 P. 919) "The unencumbered funds are applied in this order. (1) Pay priority claims, such as bankruptcy administrative expenses, wages or benefits up to 2000 dollars per employee, consumer's deposits up to 900 dollars, and most unsecured taxes; (2) To pay general unsecured creditors with timely filed claims coming before tardy ones." (3) To pay no compensatory fines or penalties;
(4) To pay legal interest on unsecured claims. In practice the estate is rarely adequate to pay unsecured creditors even Fifty cents on the dollar; No assets cases are very common." (Bagley, Constance E. 2002 P. 919) Under chapter 11 and any major decisions that need to be made concerning the business has to have the approval of the bankruptcy court. Under chapter 7 the plan that is developed has to be approved by a judge, and must be done in good faith.
An individual can file for bankruptcy under chapter 7 or 13. Chapter 7 for an individual is almost the same as it is for a business. One of the differences is that you're not going out of business. Under chapter 7 a trustee is appointed and oversees all your assets, and in some states they allow you to keep your house. Normally individual debtors get a discharge. "There are non dischargeable debts such as (1) Taxes; (2) Educational loans (unless repayment would constitute an undue hardship); (3) spousal or child support; (4) fines or penalties (5) drunk driving liabilities; and (6) claims arising from fraud or theft or willful and malicious injury." (Bagley, Constance E. 2002 P. 919) The criteria the court looks at when assessing undue hardship is whether a debtor can "maintain a minimal standard of living for the most of the loan during repayment period, depending on current rent, income and expenses." The second thing the courts look at is whether or not the debtor has made good faith repayments efforts. (Bagley, Constance E. 2002 P. 919) Under chapter 7 individual can keep certain property which is not included in the bankruptcy estate such as a house, car, trade tools, and alimony or injury settlement that provide for individuals future needs. Every state exemption varies and there is usually a maximum dollar amount that you can have by necessity. Under chapter 13 an individual can normally keep their property. An individual must have a steady income, and must agree to pay part of your income to creditors. A court must approve your payment plan, and budget a trustee is assigned and will collect your payments and distribute it to your creditors. The trustee job is also to make sure that you live up to the agreement of the plan. "Creditors can object to the plan if it is done in bad faith." (Bagley, Constance E. 2002 P. 921)
Unfortunately I have experienced a chapter 13 filed against me. I lent my former girlfriend Eighteen Thousand dollars and zero cents. She filed for Chapter 13 bankruptcy relief on Dec 1 2004. On the court documents that I received it had me listed as an unsecured creditor. The payment and the length of the plan that the debtor should pay is $404.00/$2525 per month to the Chapter 13 Trustee, starting on Dec 1, 2004 for approximately 24/36 months. The Debtor shall make plan payments to the trustee from the following sources: Future earning, and Other sources of funding. Also the plan has secured claims unaffected by the plan which are her home mortgage, and automotive lean company. The fourth part of the plans is that unsecured claims get paid not less than 100 percent .The order of distribution is 1) Trustee Commissions: 2) Attorney Fees: and 3) Unsecured claims get paid. This plan has not been confirmed by a judge yet. The case is supposed to go forward on May 5, 2005. I am very interested to see what will become of this. I have learned a valuable lesson the hard way. I will never do this again. Is filing bankruptcy really a bad thing? I really don't know. Different chapter provide positive and negative things to individuals and business. Bankruptcy definitely provides some sort of relief. The relief bankruptcy provides gives individual and business a chance to start all over again. It's almost like a do over. So to file bankruptcy or not to is the question?
What is a contract? Contracts can be entered to orally or written. Contracts help keep a promise that might occur in the future or may not even happen at all. Are contracts really needed in our lives?

A contract is a legally enforceable agreement between two or more parties.
The core of most contracts is mutual promises. (In Legal terminology, Consideration") "Consideration a promise doesn't always constitute a valid contract. Each party must provide some sort of value to form a valid contract. The thing value, known as consideration, can be money, an object, a promise a service, or the giving up rights to do something." (Bagley, Constance E. 2002 P. 196,197) Contracts are enforceable by the courts. If one of the parties meets the terms of the contract, and the other party doesn't, this is considered to be a breach of a contract. The party that didn't breach the contract could receive some sort of relief from the court such as money. Contracts help structure
relationships.
The four elements of a contract are an agreement, consideration, contractual capacity, and legality. A contract must have an agreement. An agreement includes an offer and acceptance. Two is consideration. Three Contractual capacities, both parties must have the ability contractual capacity to do so. A minor can't enter into a contact they don't have contractual capacity. Four is Legality which states the contacts purpose. The law recognizes everyone's ability to enter into a contract freely. This right is protected by our constitution. The law however will look out for parties that were forced into contracts. If one parties had more power over the other then the court would step in. The court also basically makes sure that the contracts were done in good faith. If the contract was done in good faith the contract becomes binding.

When I moved to Arizona I moved into the Coresian apartments. I signed a one year lease. The apartment didn't meet my standards of living so I wanted to break my lease without paying any lease agreement fines. In order to get out of the lease I hired the Arizona Tenants Association. The Tenant Association discovered that the property was not registered with the Maricopa County Assessor in accordance with Ariz. Rev. Stat. Ann. 833-1902, Which states that it is illegal for occupies as a rental property. Consequently, the rental agreement we argued in writing should be null from the beginning because it seriously offends law and public policy insofar the conditions are unsafe, and insofar as the rental dwelling under the Arizona law cannot be occupied. Under contract law every contract does imply that good faith and fair dealing. The lease contract is unconscionable in it's entirely, and thus unenforceable. I sent other correspondences alert them that I plan to vacate the property and that I want my security deposit back, and after exchanging different correspondences over a month's time they gave in and gave me back my security deposit, and took no further action against me. So the contract was terminated.

Contracts are formed every day and can be enforced by law. If an agreement is to be considered to be binding and obligatory by the court system, the party that fails to live up to the agreement they could be sued. So I belief contract are important to our society and contracts should be apart of our lives.
Every day somebody purchases some sort of product that we feel that can be beneficial to our every day living. We never expect that the product may harm us. How beneficial the product is depends on the individual consumer. Product liability refers to the liability of any or all parties that worked on manufacturing the product. Where does liability really fall?

What is product liability? "Product liability refers to the liability of any or all parties along the chain of manufacture of any product for damage caused by that product. This includes the manufacturer Distributors, wholesalers and retailers. Injuries can include the purchaser, user or bystander, or their property. "(Bagley, Constance E. 2002 P. 319) Products liability claims can be based on negligence, strict liability, or breach of warranty. During a strict liability case it irrelevant how much care the manufacture used when manufacturing the product. The manufacture will be held liable for a defective product. "A strict liability claim a plaintiff must first prove that their property was damaged by the product. Second a plaintiff must prove the injury was caused by the product, and third the plaintiff must prove that the product was defected at the time it left the defendants, and did not substantially didn't change hands along the way." "(Bagley, Constance E. 2002 P. 320) there could be three different types of product defects that put reasonability to the manufacture and suppliers: There could be manufacturing defects
Design defects, and defects in marketing. Manufacturing defects can happen when a product is being designed or assembled. Design defects occur before the product is manufactured. Marketing defects happens when the marketer doesn't warn the consumer of hidden dangers of a product .while the item might serve its intended use, it can still be dangerous.
One example I can thing of is the Ford Pinto Case.
In 1971 Ford decided to manufacture the Ford Pinto car in Two years instead of the normal Three years it takes to produce a car. The Pinto failed most safety concerns. If the Pinto was hit from behind the car would explode. Ford had an ethical dilemma should they sell the car knowing that the dangers of this vehicle. "Ford engineers estimated that cost of technical improvements that would prevent the gas tanks from exploding was about $11 per vehicle. Ford estimated that that there was about 180 deaths a year caused by fire or rollovers. "NHTSA in 1971 concluded that for every time that somebody is killed the cost is about $200,725.00 per death. "(William, H. Shaw 2002 P. 78-79) If this case was to take place today the manufacture would have been held liable for manufacture defects, and Design Defects and I believe that they would have had to pay a lot more than the $200,725.00 per death caused by this car. For every situation Liability might fall on somebody else. So the next time you purchase a product buy at your own
risk.