Yablon Fall 2000 Corp Outline

Yablon Fall 2000 Corp Outline - Elan Weinreb September 4,...

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1 Elan Weinreb September 4, 2000 Corporations Outline – Professor Yablon, Section A I. Introduction – 8/29/2000 – A. The concept of corporation is not necessarily tied to business at all. There are a lot of corporations that are not business corporations. YU is a corporation, but a not-for-profit corporation. Not-for-profit corporations are subject to corporations laws, however. The City of New York is organized as a municipal corporation, not a business corporation. B. This course focuses on the business corporation, or more exactly, business associations . This is a course that is focused on the way in which people working together create value. People coming together to earn profit or value is the essence of business associations. C. Americans excel at being corporate lawyers. The reason is that American lawyers are perceived at being better since their attitude toward corporate law is different than most people. American lawyers find loopholes around problems and solve them. The fact that we can solve problems make us better lawyers. We are PROBLEM SOLVERS. D. Fowler v. Penn Tire Co. – Consignment v. Absolute Sale as a matter of contractual interpretation 1. Rule of Law: Where the terms and meaning of a contract are clear and not disputed, the contract is to be interpreted according to its language. Only in cases of ambiguity or potential bad faith dealings are the actions of parties scrutinized with regards to adherence to a contract. 2. Facts and Disposition: PATire (Penn) was a tire manufacturer. Martin was a distributor who went bankrupt. PATire sued the trustee in bankruptcy to get its tires back on grounds that it had consigned the tires to Martin. Court held that the transaction was a consignment and not an absolute sale, reversing a lower court in the process, based upon the actual language of the contract between PATire and Martin. 3. It might not make economic sense to for Penn to run a dealership as well as a manufacturing business. Too many expenses is a possible answer. 4. Rationale for majority: Inventory reports must be forwarded and inventory must be taken. The company has access to consigned stock at all
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2 times under the contract. 5. Rationale for Dissent: Martin had the right to residual profit. When the tires got sold – who made the money? Martin! This tells you that the tires were sufficiently in Martin’s control to constitute the transaction between PATire and Martin as a sale. Risk of loss was also a burden upon Martin’s shoulders. Martin had to buy fire insurance. Economic reality seems to indicate that all of the burdens of ownership are with Martin. He seems to be the owner. 6. Summary: a) 1 st court – lower court – said that economic reality controls. b)
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Yablon Fall 2000 Corp Outline - Elan Weinreb September 4,...

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