Agency law – is concerned with any “principal”-” agent” relationship; a relationship in which one person has the legal authority to act for another. Such relationships arise from the explicit appointment, or by implication. The relationships generally associated with agency law include guardian-ward, executor or administrator-decedent, and employer-employee.
The law of agency is based on the Latin maxim “Qui facit per alium, facit per se,” which means “he who acts through another is deemed in law to do it himself.” Agency, in its legal sense, nearly always relates to commercial or contractual dealings.
Antitrust- To prevent trusts from creating restraints on trade or commerce and reducing competition, Congress passed the Sherman Antitrust Act in 1890. The Sherman Act was designed to maintain economic liberty and to eliminate restraints on trade and competition. The Sherman Act is the main source of Antitrust law. The Sherman Act is a Federal statute and as such has a scope limited by Constitutional constraints on the Federal government.
The commerce clause, however, allows for a very wide interpretation and application of this act. The Act applies to all transactions and businesses involved in interstate commerce. If the activities are local, the act applies to transactions affecting interstate commerce. The latter phrase has been interpreted to allow the broad application of the Sherman Act.
limited liability- the maximum amount a person participating in a business can lose or be charged in case of claims against the company or its bankruptcy. A stockholder in a corporation can only lose his/her investment, and a limited partner can only lose his/her investment, but a general partner can be responsible for all the debts of the partnership.
Parties to a contract can limit the amount each might owe the other, but cannot contract away the rights of a third party to make a claim. Collective bargaining agreement- is the ultimate goal of the collective bargaining process. Typically, it establishes wages, hours, promotions, benefits, and other employment terms as well as procedures for handling disputes arising under it.
Because the collective bargaining agreement cannot address every workplace issue that might arise in the future, unwritten customs and past practices, external law, and informal agreements are as important to the collective bargaining agreement as to the written instrument itself.
Collective bargaining consists of negotiations between an employer and a group of employees to determine the conditions of employment. The result of collective bargaining procedures is a collective agreement.
Employees are often represented in bargaining by a union or other labor organization. Collective bargaining is governed by federal and state statutory laws, administrative agency regulations, and judicial decisions. In areas where federal and state law overlap, state laws are preempted what makes a contract valid?
To determine if a valid contract exists, it is necessary to prove the following:
Consideration was given. Consideration is an essential element of an enforceable contract; it is something of value given or promised by one party in exchange for an act or promise of another. The amount of consideration paid in money is typically not important in determining whether the contract is valid (e.g., one dollar could be sufficient as consideration).
Consideration does not have to be money. It can be a promise to refrain from doing something, or a promise to do something. It cannot be a gift because one of the parties is not required to do anything in return for receiving the gift.
The subject matter was legal. For example, if you wish to sue someone for failure to pay for illegal drugs, you could not resolve the matter in court, because the subject matter of the underlying transaction was illegal.
Contracts can be express, implied by conduct, or implied in law. An express contract is either an oral or a written agreement whose terms are manifested by clear and definite language. An implied contract is an agreement inferred from the conduct of the parties.
This occurs where the parties may not have precisely agreed on all key terms but the contract was performed anyway. An implied-in-law contract (also called a quasi-contract) is created by operation of law to avoid unjust enrichment of one party at the expense of another.
In a quasi-contract there has been no agreement or meeting of the minds; one party has conferred a benefit on another under such circumstances that fairness and equity require compensation. This occurs for example when a doctor helps an unconscious patient.
The patient, later on, receives a bill for the doctor s services. Since competent medical care was provided by the doctor with the expectation of being paid, the patient will be required to pay for the reasonable value of the doctor s services.
Although many contracts can be oral and still enforceable, certain types of agreements must be in writing to be valid. For example, contracts: involving the sale of land in most states or a property interest (except for leases of less than one year), involving the sale of goods exceeding $500 in value, not able to be fulfilled within a year, concerning ones offer to pay for the debt of another, involving promises made in consideration of or affecting a marriage (e.g., prenuptial agreements or property distributions on divorce) must be evidenced in writing and signed by the party to be charged (i.e., to which the contract applies) to be valid.
When a contract is formed, all parties must live up to the promises outlined in the agreement. Breach of contract is the unjustified failure of a party to perform a duty or obligation specified in a contract. If the contract is impossible to perform because of force majeure, such as a flood or strike, this may be a defense. Other defenses typically raised to defeat the validity or enforceability of a contract are:
No consideration was given. The subject matter of the contract required it to be in writing. The contract was entered into through fraud. Important terms were intentionally misrepresented. The contract was entered into under duress or coercion. The parties were unclear about the key points of the deal.
A contract required someone to do or sell something illegal. The contract was entered into with someone who lacked requisite mental capacity or was underage. A contract was entered into with a person who lacked the legal authority to bind another (e.g., a low-level bank employee who did not have the legal power to verbally approve a million-dollar loan).
Surety contract – an agreement by one person or entity to pay the debt of another, his is also referred to as a personal guaranty and must be in writing to be enforceable.
The Equal Pay Act amended the Fair Labor Standards Act in 1963. The Equal Pay Act prohibits paying wages based on sex by employers and unions. It does not prohibit other discriminatory practices bias in hiring. It provides that where workers perform equal work in jobs requiring “equal skill, effort, and responsibility and performed under similar working conditions,” they should be provided equal pay.
The Fair Labor Standards Act applies to employees engaged in some aspect of interstate commerce or all of an employer’s workers if the enterprise is engaged as a whole in a significant amount of interstate commerce.
The Age Discrimination in Employment Act (ADEA) prohibits employers from discriminating based on age. The prohibited practices are nearly identical to those outlined in Title 7. An employee is protected from discrimination based on age if he or she is over 40. The ADEA contains explicit guidelines for the benefit, pension, and retirement plans.
The Equal Opportunity Employment Commission (EEOC) interprets and enforces the Equal Payment Act, Age Discrimination in Employment Act, Title VII, Americans With Disabilities Act, and sections of the Rehabilitation Act. The Commission was established by Title VII. Its enforcement provisions are contained in section 2000e-5 of Title 42, and its regulations and guidelines are contained in Title 29 of the Code of Federal Regulations, part 1614.
Under the federal Fair Housing Act and Title VII of the Civil Rights Act of 1968, among other laws, many forms of housing discrimination are illegal. Homeowners are prohibited from making adverse decisions to lease or sell real estate because of a person s age, religion, sex, color, or national origin. In some states, people cannot be denied a lease based on sexual orientation. It is also against the law for real estate agents to steer prospective buyers away from certain areas.
Negligence is one party s legal failure to exercise a sufficient degree of care owed to another. If you are injured as a result of the careless or reckless conduct of another person or because someone failed to act with the degree of care that he or she had a duty to provide (e.g., a public bus driver who failed to operate a bus safely), liability (legal wrongdoing) against that party or his employer may exist.
Generally, a trust is a right in the property (real or personal) which is held in a fiduciary relationship by one party for the benefit of another. The trustee is the one who holds the title to the trust property, and the beneficiary is the person who receives the benefits of the trust.
Antitrust law attempts to ensure that market competition is protected from an organization or cartel with a monopoly on a given product. Much of antitrust enforcement tries to create a balance between the benefits of coordination and consolidation, such as efficiencies that reduce the price or improve quality, and the detriments of market power that can lead to higher prices or reduced innovation.
Corporate trusts grew rapidly in the US from 1880 to 1905, creating the atmosphere for President Theodore Roosevelt to launch his now-famous trust-busting campaigns. The era of antitrust legislation stems from the Sherman Act of 1890. The antitrust laws were based on the constitutional power of Congress to regulate interstate commerce. It declared illegal every contract, combination, or conspiracy in restraint of interstate and foreign trade.
The Sherman Act makes monopolization illegal. The two elements of monopolization are: “(1) the possession of monopoly power in the relevant market and (2) the willful acquisition or maintenance of the power as distinguished from growth or development as a consequence of a superior product, business acumen, or historical accident.”
The Sherman Act was designed to eliminate restraints on trade and competition. It is the main source of antitrust law. While the Sherman Act protected monopolies, Congress determined that it was quite comprehensive in its? self. It was supplemented in 1914 by the Clayton Antitrust Act, which prohibited exclusive sales contracts, inter-corporate stockholdings, and unfair price-cutting to freeze out competitors.
The Clayton Act of Seal Straugh 1914 makes price discrimination illegal, forbids tying arrangements involving only goods, and makes anti-competitive mergers and acquisitions illegal. The Sherman and Clayton Antitrust Acts were made to promote competition between companies making similar products.
To assure the effectiveness of these laws, the Federal Trade Commission Act of 1914 established the body of overseers that govern unfair and unlawful trade practices. The provision surrounding unfair price-cutting was strengthened under the terms of the Robinson-Patman Act of 1936.
There have been many amendments to these laws over the years. An early federal success came with the Supreme Court decision of 1911 that forced the giant Standard Oil Company to split up into independent entities.
Antitrust action declined in the 1920s but was vigorously resumed in the 1930s under President Franklin D. Roosevelt. Antitrust legislation held firm for several decades. The Tunney Act of 1974 established public notice and judicial oversight procedures regarding consent decrees entered into by the government to settle antitrust cases.
Antitrust enforcement was again de-emphasized in the 1980s under Presidents Reagan and Bush. The growth of huge conglomerates that control multiple companies has hindered the enforcement of antitrust legislation.
With growing unpopularity, antitrust laws have been criticized for hindering the ability of US corporations to compete internationally. There have also been an extreme impact on US shores. The Microsoft Antitrust Suit has not only rocked the company, but the entire computer industry, the stock market, and the US justice system as well.
The United States VS Microsoft
Back in 1975, an intense, visionary man who co-owned a small firm in a budding industry imagined a future where people at every desk in all the offices would have a small computer on which they would use his software. That man was Bill Gates; the company was Microsoft.
However, even Mr. Gates did not foresee a future in which the chief antitrust prosecutor of the United States and his counterparts in the governments of 20 U.S. states would sue him for charging prices that are too low. In recent comments, Mr. Gates has revealed his about the antitrust laws. He seems to have assumed that they were pro-consumer, and he saw his company doing things that helped consumers, even the least technical of consumers, log on to the digital age.
The Justice Department charged Microsoft with engaging in anticompetitive and exclusionary practices designed to maintain its monopoly in personal computer operating systems and to extend that monopoly to internet browsing software on May 18, 1998.
Twenty state Attorneys General and the District of Columbia filed a similar action. They alleged Microsoft illegally abused its “Windows” monopoly power to curtail and eliminate competition, force computer manufacturers to take its separate Internet “browser” and other applications, and deny consumers who buy personal computers the benefits of a free, open and competitive market.
“This action will protect innovation by ensuring that anyone who develops a software program will have a fair opportunity to compete in the marketplace,” said Joel I. Klein, the assistant attorney general of the Antitrust Division. “The lawsuit we filed today seeks to put an end to Microsoft’s unlawful campaign to eliminate competition, deter innovation, and restrict consumer choice.
In essence, what Microsoft has been doing, through a wide variety of illegal business practices, is leveraging its Windows operating system monopoly to force its other software products on consumers. Inventors and investors cannot and will not develop and market innovative software programs if they know that Microsoft can use its Windows monopoly to block the distribution of their programs and to force consumers to buy Microsoft’s competing products.”
The reality, however, is that one of the antitrust action’s major uses has been to penalize successful competitors. Sometimes the suits are brought by federal enforcers of antitrust laws. More often they are brought by bitter losers in the competitive process.
According to Georgetown University’s Steven Salop, a top antitrust official in the Carter administration’s Federal Trade Commission, and New York University’s Lawrence J. White, chief economist in the Justice Department’s Antitrust Division under Ronald Reagan, the second most common kind of private antitrust suit is one brought by rivals.
Competitors are unlikely to bother suing rivals that keep their output low and prices high. Microsoft is the ultimate competitor, setting the price of its browser, Internet Explorer, at zero. Microsoft’s main competitor in the browser market, Netscape, was upset at such low-price competition and applauded the Clinton administration’s lawsuit.
It appeared as though Microsoft was leveraging its Windows operating system monopoly to create a new browser monopoly. That may not be the case, as appearances deceive. Until about 40 years ago, the standard economic argument was that a monopoly could be extended from Product A to Product B by requiring purchasers of A to buy B.
But as an antitrust scholar and former federal judge Robert Bork showed in his 1978 book, The Antitrust Paradox, this seldom works, because charging a premium for B reduces the price that can be charged for A.
Mr. Bork explicitly rejected the government’s reasoning. He wrote: “This is not a case about ‘leveraging’ or ‘tie-ins,’ as it is frequently described, even by government lawyers who understand the case.” 9 So what is the lawsuit about? Mr. Bork says Microsoft is engaged in predatory pricing, giving its browser away to knock Netscape out of the market.
However, economists have shown that predatory pricing doesn’t typically make sense, because the losses are often larger to the predator than to the prey and because, once the predator raises prices, anyone who has bought the prey’s assets at fire-sale prices becomes a low-cost competitor.
The most famous allegation of predatory pricing was made against John D. Rockefeller and Standard Oil of New Jersey.10 None the less, in a 1958 article in the Journal of Law and Economics, University of Washington economist John S. McGee concluded, after studying the transcript of Standard Oil’s 1911 trial, that there was no evidence that Standard was guilty of such tactics.
In any case, the standard economic argument about extending monopolies is inapplicable to Microsoft’s case. Microsoft doesn’t charge anything for Product B, Internet Explorer. Of course, the company benefits from giving it away.
Microsoft wants to make it easy for computer manufacturers to install the browser so that PC buyers will use Windows applications instead of software written for Netscape Navigator and will use goods and services sold over the Internet by Microsoft and its partners. Is this monopolistic? No more so than a shopping mall owner’s providing free parking and then collecting higher rents from retailers that value the increased shopping.
In buying Netscape, was AOL gunning for Microsoft? For months, Microsoft Corp. thought it had a late-breaking piece of evidence that would save the software giant from the government’s antitrust noose: The three-way deal announced late last year among America Online, Netscape Communications, and Sun Microsystems. The alliance proved that Microsoft faced formidable competition, Microsoft lawyers contended.
There was great anticipation in the courtroom on June 14 when Microsoft recalled AOL Senior Vice-President David Colburn to the stand as a hostile rebuttal witness. For hours, Microsoft attorney John Warden pressed Colburn to concede that AOL had secret plans all along to take on Microsoft in the Internet browser business.
But by the end of the day, the line of questioning didn’t seem to help Microsoft’s case appreciably. Even U.S. District Judge Thomas Penfield Jackson told Warden in a bench discussion that he didn’t quite see the value of the new testimony.
Jackson suggested that, since Colburn hadn’t seen some of the key documents that Warden was putting before him, that Microsoft might want to call a witness who was familiar with them. That would be AOL chief executive Steve Case, a prospect that failed to enthrall Microsoft since Case was already on record saying that he never intended to compete with Microsoft.
Colburn had testified earlier for the government that AOL chose Microsoft’s Internet Explorer browser for its online service because Microsoft offered something that Netscape couldn’t, promotional space on the dominant Windows operating system desktop.
As part of the deal, AOL was allowed to provide only limited promotion of rival Netscape’s Internet browser. But all the while that Colburn was testifying last October, AOL was in hush-hush negotiations to buy Netscape and its browser business. The deal was announced last November. Warden tried to make the point that AOL intended to dump its near-exclusive promotion and distribution of Microsoft’s browser and substitute its own Netscape product once its contract with Microsoft expired in the year 2000.
On Sept. 20, 1999, and E-mail from Case indicated that the company was seriously mulling the possibility of dumping Internet Explorer at some point. Case wondered if buying Netscape and committing to migrate to their browser instead would help Microsoft to pull AOL from Windows 98.
“My main point is we shouldn’t assume we need to or want to maintain IE as primary browser,” Case wrote. “Maybe that’s the right answer, but maybe not — we should push down on all possibilities before deciding.”
However, government attorney David Boies stood up and cited rules that he said required Warden to read the E-mail’s response. Jackson then ordered Warden to read the response by AOL President Robert Pittman.
Pittman’s response alluded to Microsoft’s power in the marketplace which made it infeasible for AOL to make a change any time soon: “I do think MSFT is too strong to throw them out of the tent — they can hurt us if they think they have no other option.” 13 Indeed, Colburn stuck to his story that the “consensus for a long time” within the company was to stay with Microsoft’s browser until the contract expired. And that’s what the company has done.
Warden also submitted an internal AOL document from Nov. 3 that described how the company should portray the AOL-Netscape-Sun deal to Wall Street and the press. According to the document, AOL was well aware that the public would perceive the deal as an attempt by AOL to take on Microsoft in hand-to-hand combat.
Unfortunately, the document worked as much against Microsoft as for it, since it notes that the “timing of the acquisition alone could very well end up institutionalizing an Apollo v. Microsoft competition.” The document also notes that “our primary purpose in acquiring Odyssey.
In November of 1999, House Majority Leader Dick Armey made the following comments regarding reports that the Justice Department antitrust division will take action against Microsoft: “The contemplated anti-trust action against Microsoft is the kind of government micro-management every other nation in the world is rejecting.
“This is not about choosing sides in the high tech industry. Such an arbitrary use of unchecked power could send shock waves throughout the economy, as the unprecedented nature of the government’s intervention weighs on the mind of every new investor. All entrepreneurs are threatened when the Justice Department launches an all-out assault on creativity and success.
“The President thinks the government knows best. But who knows more about the competition: a few lawyers in a Washington bureaucracy, many of whom have never held a job in the private sector, or the thriving entrepreneurs in today’s high-tech industries, many of whom started in their garages and have now created millions of jobs?
“At the same time the Administration contemplates stunting innovation and creativity, they are desperately seeking answers to the year 2000 computer problem, which threatens everything from cutting off Social Security checks to grounding all air travel. How ironic that this Administration is preparing to hamstring the very innovation necessary to avoid the massive potential chaos the nation will face on January 1, 2000.
“Is the President ready to blow up his ‘bridge to the 21st century?'” Just as important, the complaint is really about the past. At issue is the claim that Microsoft requires vendors using Windows 95 to install Microsoft’s Internet Explorer.
This, according to the claim, is an improper use of Microsoft’s market power. Currently, an Internet browser and the underlying operating system may be purchased separately. Technology, however, is moving fast and the browser and the desktop are merging. Windows 98 aims to make them indistinguishable. The era of a stand-alone browser company is overdue.
The Department of Justice’s antitrust investigation of alleged abuses by Microsoft misapplies outmoded laws and regulations of the analog era on the digital economy. Microsoft is a success because it understands the economic realities wrought by Moore’s Law – that the number of components that can be packed on a computer chip doubles every two years while the price stays the same.
Justice should stay out of this high-tech battle for two reasons: It is not equipped to regulate innovation and dynamic change, and this complaint is really about the past, not the future.
Invoking antitrust jurisprudence is particularly ill-suited for analyzing Microsoft and the connected computing industry. The laws are hopelessly ill-equipped to comprehend the nature of the digital economy. The Sherman and Clayton Acts were crafted to address the static era of massive, long-lasting industrial infrastructure and mass durable-goods markets.
The existing law does not address a dynamic economy where markets and market leadership can arise and disappear within 18 months or less. Moore’s Law and the Law of the Installed Base (that when technological change occurs, whoever has an installed base of customers is at greater risk than a new entrant is) require a new approach.18
Findings of Fact and Conclusions of Law
The suit against Microsoft that began with allegations of monopoly in 1997 was decided by the Honorable Thomas Penfield Jackson in the United States Supreme Court. Justice Jackson handed down his Memorandum and Order along with the Final Judgement on June 7, 2000. Charging documents stated that Microsoft violated the Sherman Act, Sections 1 and 2, as well as various state laws.
Finding in the favor of the plaintiffs, Justice Jackson determined that would mandate both conduct modification and structural reorganization by the defendant when fully implemented. The Memorandum continues to cite Microsoft claims that the proposed remedies were “draconian” and “unprecedented.”
Indeed, Microsoft felt that additional discovery was warranted and that a second trial is held. Owing to a delay of five months by the court in its entry of the Conclusion of Law, and the enlistment of mediation, however, the Court rejected Microsoft stand.
Microsoft took the position that it was surprised by the decision and needed ample time to act on the Court?s Order. Since Microsoft’s cases had been before the Court and occupied much of its attention for the past two years, Justice Jackson felt that additional delay was unmerited. Despite Microsoft’s continuing protests that none were committed, Microsoft had been found guilty of antitrust violations, following a full trial.
The Court was convinced, for several reasons, that a final – and appealable – judgment should be entered quickly. It also reluctantly came to the conclusion, for those same reasons, that a structural remedy is mandatory. The Court’s position is simply this,?Microsoft as it is presently organized and led is unwilling to accept the notion that it broke the law or accede to an order amending its conduct.
In the Court Findings of Fact and Conclusions of Law document, it stated that Microsoft does? Recognize or concede that any of its business practices violated the Sherman Act. Microsoft officials stated publicly that the company has done nothing wrong and that it will be vindicated on appeal. There is a substantial body of public opinion, which holds to a similar view.
That assertion is now being put to the test. If this is indeed the case then this should be addressed by an appeal court as soon as possible, to confirm the opinion of Microsoft’s innocence and to intervene in any modification and reconstruction activities before they become irreversible.
In every corporation, some individual bodies act on behalf of the company, and they are known as officers of the company. But such officers need not be a director or employee of the company every time. From every officer of the corporation, it is expected that they shall perform their duties under the provided umbrella of law. Many times, such officers commit acts that are outside of the boundaries of expectation of law provided under the Corporations Act, 2001 (Cth).
Although these acts can be done without any mala fide intentions, still proceedings can be initiate against such deeds of an officer of the Corporation. Such deeds of an officer don’t need to lead an adverse impact to the corporation, yet these officers shall respond to breach their duties provided under section 180,181, and 182 of the Corporations Act, 2001.
The presented case brought an argument in between Auden Developments Pty Ltd, a corporation that was under the process of liquidation (hereinafter referred to as “Auden”), and Mr. Dinoris, it is one of the liquidators. In this case, the question of argument was an act of Mr. Dinoris along with his co-appointee Mr. Combis (hereinafter jointly referred as “Mr. Dinoris”), which has come into light when the company has changed it is a present liquidator and appointed another person on this designation, named Mr. Clout.
The lead issue of the case was the fact that there were some funds of the corporation which has transferred from the corporation’s account but to whom they have been paid was not traceable. Mr. Dinoris, being liquidator of the company did not ask about such funds to the sole director of the company who was Ms. Nichols. In addition to this, there was also a boat registered in the name of the garden, who has sold but Mr. Dinoris did not supervise such sale and he also had no idea about the disposal of the sale value of the boat (Maddocks, 2016).
As per the requirement of Section 180 and 181 of Corporations Act, 2001, it is expected from an officer, that these persons shall charge their duties in the best effective manner and in good faith of the corporation (Maisto, 2009). But in the cited case, Mr. Dinoris resulted failed to do so, thus Asden commenced a case against Mr. Dinoris.
Mr. Dinoris has appointed as liquidator of the company on22 December 2010. Before a week ago his appointment some funds worth $236,500 has transferred from Asden’s bank account. Later on, these funds declared as missing funds as nobody could track that to where the same have transferred. Here, being the officer cum liquidator of asden it was the duty and statutory liability of Mr.
Dinoris that he must ask Ms. Nichols, that to which account such missing funds have transferred, as apart from being a director and sole shareholder of the corporation, she was also the signatory of the account from where those funds have debited, but Mr. Dinoris did not ask any questions to Ms. Nichols.
Asden put one more allegation on Mr. Dinoris, as there was a sale of a boat to a third party, but Mr. Dinoris did not properly take care of this sale. Inclusive this, he also had no information about the distribution of amount, which asden has received in consideration of the aforementioned sale. Although Mr. Dinoris has appointed a sale agent to look after this sale, yet it was his duty to at least maintain a record of said transaction.
We observed a total of 120 participants from Texas State University. Students were observed in their everyday classroom lectures. Observers were instructed to only observe students seated beginning from their right to left, in front right to left, and lastly, directly in front. The observation tactic was used to determine which students to observe first.
Observers were observing participants see whether cellphone use distracts students from taking notes in class. The independent variable is cellphone use, which was defined as being actively engaged and looking at your phone for longer than 5 seconds or more during the 5-minute interval. There were two variables, cellphone use, and non-cell phone use.
Participants who looked or touched their phone for more than 5 seconds were categorized under cellphone use. The participants that were categorized under non-cellphone use were the ones that did not touch or look at his or her cellphone for at least 5 seconds or more.
The dependent variable is attention, which was defined as taking notes by visibly typing or writing down information given in the lecture. There were two levels: taking notes and not taking notes. Those participants that were actively writing or typing notes were categorized undertaking notes and those who were included in the not taking notes category were the participants who didn’t write or type notes.
The type of study used was a naturalistic observation. The observers sat in their normal seats and let the surrounding seats fill in randomly. Under the possible circumstance of empty seats, the observer was instructed to begin observations closest to them from right to left, then in front right to left and the final participant option would be directly in front.
About 10-15 minutes into class the observer would observe a maximum of 2 students for 5 minutes each. During the 5 minutes, the observer recorded if the participant looked or touched their phone for more than 5 seconds or if they were paying attention by actively typing or writing down notes.
For the results, a Chi-Square test of independence was used to determine the relationship between cellphone use and the impact on attention. The variables tested showed a statically significant relation, X2(1, N = 120) = 21. 89, p =. 001. Participants who were categorized as non-cell phone users were more likely to paying attention by taking notes than those who were cellphone users that did not take notes.
Sections 180 of Corporations Act 2001 define that an officer of the corporation must perform his/her duties with the required amount of responsibility and attentiveness. The roles of an officer can vary according to position, but the essential requirement of his post is his/her best judgment (Legalvision, 2015).
Section 181 of the Corporation Act, 2001 communicates the requested form of the intention of officers of the corporation. This section ascertains that an officer of a corporation must always work in it is excellent belief. This section made responsible corporation’s directors and officers play their role in the corporation for a convenient purpose.
This section confirms the aspect that is needed to be followed by an officer of a corporation while taking any decision or conducting any business action (Lo, 2015)All the officers and director of the corporation must follow their duties for the favor of the corporation, for it is the finest interest and for a meaningful cause (Federal Register of Legislation, 2018).
Section 182 of the Corporations Act, 2001 also defines the duties and obligations of director, employee, and officer of the corporation. This section demands that aforesaid persons must not improperly use their designation in the corporation and must not take unfair advantage of their position (Austlii, 2018).
In the case in case Fodare Pty Ltd v Shearn (2011) NSWSC 479, it was held that a director as well as every officer of the corporation must follow their duties provided under section 180 alike a responsible person.
While performing their duties, such officers must be aware of every possible result of their deeds and actions. The reason why duties have breached? In the assigned case, being the liquidator, it was expected from Mr. Dinoris under section 180 of Corporations Act, 2001 that he shall look after to every financial transaction of the asden.
Whereas in asden some valuable funds were missed, and Mr. Dinoris does not keep any records of the same. He also did not ask any question to Ms. Nichols about the clearance of such funds. It is assuming on the part of Mr. Dinoris that even on asking about those funds to Ms. Nichols, she must not be able to answer, but this cannot be an appropriate ground to take a plea.
So here, Mr. Dinoris become failed to perform his duties as required from him according to Corporations Act, 2001. As Mr. Dinoris was designated an officer asden, he must properly deliver his services and must have questioned Ms. Nichols, regardless of the fact the reply of the same was available with her or not. Besides, Mr. Dinoris has also not suitably reviewed the sale transaction of the boat, which was asden’s property.
As Mr. Dinoris was working as a liquidator of asden, according to Section 180 of Corporations Act, 2001, it was his charge to review and control every transaction of asden like an answerable officer (Mills Oakley, 2016). It was held in the case Macks V Viscariello, (2017) SASCFC 172 It is assuming that if an individual is acting as an officer of a corporation, he/she must be aware with his/her role in the organization, and also must follow delegated responsibilities with due care.
Running head: BACKOFFICE BUSINESS BRIEF 1 Business Law and Ethics BackOffice Business Brief Patten University BACKOFFICE BUSINESS BRIEF 2 Constitutional Rights and Guarantees BackOffice is a new startup business that will provide potential clients with an application (app) that would automate certain business functions.
BackOffice will be selling the app to certain business clients that will use it to facilitate their customers’ transactions. It is important that the owner of this company seek the help of a lawyer in order to get the proper legal advice on how to start the business.
The Consumer Financial Protection Bureau (CFPB) is planning to propose regulations that could control and restrict the kind of transactions that BackOffice will automate. As a result, this could slow down the sales of the app since new restrictions might be imposed on some of its functions.
The CFPB recently took action against a similar company called Dwolla, which acts as an online payment platform. The action was taken because Dwolla misled its customers about their online payment system data security practices.
The company had falsely stated that their security standards exceeded those of the industry and also failed to encrypt sensitive consumer BACKOFFICE BUSINESS BRIEF 6 that the application could have unforeseen bugs. In that case, BackOffice will rectify the situation. Ethical Consideration II It is critical for BackOffice to be extremely clear with its business investors when it comes to their expectations in regard to the commercial performance of the application.
Investors should be able to know what kind of return they are to expect on their investment. Additionally, it is unethical to fabricate any key information or hide factual data to receive the good faith and funds of likely investors. As a CEO, you must be very clear when explaining how you expect the business to perform financially in both the short and long term.
Issue The issue is whether the contract entered into by Harry, a clerk in the factory office is enforceable against the company. Rules A company can enter into a contract by the virtue of s124. There are several ways a company can contract with outsiders.
One common way is to affix the company’s common seal as illustrated in Northside Developments Pty Ltd v Registrar-General. However, according to s123, it is optional for the company to have a common seal. S127 of the Corporations Act states that a common seal is not required if two directors or a director and a company secretary sign the document.
There are two ways where individuals are capable of entering into contracts for the company. The first is the organic theory which refers to the organs of the company who are the directors, members, and managing directors. This theory allows the company to contract directly under its name as illustrated in the case of Lennards Carrying Co Ltd v Asiatic Petroleum Co Ltd.
The second way is more common whereby a company (principal) is allowed to appoint agents to act on behalf of the company under s126 of the Corporation Act. There are two types of authorities that agents are appointed through – actual and apparent or ostensible authority: s126.
An agent’s actual authority may be given expressly or not by the principal. When an actual authority comes with express instructions, this is known as an express actual authority. Actual implied authority is when an authority is not expressly agreed upon between the agent and the principal and the agent can enter into contracts like a person in the same position customarily can: Hely-Hutchinson v Braehead Ltd.
An agent has apparent or ostensible authority when the person is held out by the company [s129(3)] and when outsiders have the impression that the agent has the authority to act on behalf of the company. However, this is not actual authority but an appearance of the authority: Freeman and Lockyear v Buckhurst Park Properties (Mangal) Ltd. S128 and s129 of the Corporations Act allow the outsiders to make assumptions that the agent is complying with its company’s constitution.
The outsiders will rely in good faith on the representation and Doctrine of Estoppel will apply once representation is made. Application Based on the law and facts given when Harry did not introduce his position to Mickey, Mickey assumes under s129 that Harry has the ostensible authority customary for a factory manager and has the authority to enter into the contract with him.
However, there is no actual authority in this case as Harry has not been given actual authority by the directors or John and the office he holds does not customarily provide him the authority to enter into a contract on behalf of the factory manager. There is no representation to suggest that the company gave Harry an appearance of authority.
Conclusion To conclude, the contract is not enforceable against Alpha Ltd and Harry can be sued for breach of warranty of authority by Solder Ltd. References Lipton, P., Herzberg, ABE & Welsh, M., 2014. Understanding Company Law. (17th ed.). Australia: Thomson Reuters. Retrieved: 20 October 2014 Corporations Act 2001. Australian Corporations & Securities legislation. (2014 ed.). Australia: CCH. Retrieved: 20 October 2014.
Promotion is the period taken for the registration of the company. Two types of promoters take part in the formation, an active promoter and a passive promoter. In Twycross v Grant, a person who actively engages in the formation of a new company is known as an active promoter and the promoter can act on behalf of the company.
In Tracy v Mandalay Pty Ltd, a person who does not actively engage in the incorporation process but stood to benefit from the profits is a passive promoter. The promoter may also participate in raising share capital to maintain the business of the proposed company. A promoter owes fiduciary duties to the proposed company and potential investors.
As part of the fiduciary duties, the promoter is required to act in the best interests of the company, avoid any conflicting interests, ensure full disclosure of any interests (Erlanger v New Sombrero Phosphate Co) and any personal profits (Gluckstein v Barnes) for contracts entered into.
Based on the law and facts given, Larry is the party responsible for the incorporation of the company and thus satisfies the duties of an active promoter: Twycross v Grant. Larry owes the proposed company, Lifesaver Pty Ltd and its potential investors, fiduciary duties as mentioned above.
Under s131 of the Corporation Act, the law states that a company is bound if the contract is entered before registration and ratified within an agreeable time by both parties. This is supported in the case of Aztech Science Pty Ltd v Atlanta Aerospace.
If the directors decided not to ratify Larry’s lease, the promoter who entered the pre-registration contract on behalf of the company, which is Larry will be liable for any damages in virtue of s131 and Bay v Illawarra Stationery Supplies Pty Ltd.
Larry will have to compensate both parties whereas Lifesaver Pty Ltd will not be affected. However, Larry can be released from either or all part of the liability if the company signs a letter of release from the liability clause but he will not be entitled to indemnity depending on the company.
Lifesaver is a proprietary company as there in the name. A proprietary company is prohibited from issuing shares to the public except to its existing shareholders or employees whereas the only a public companies can raise funds from the public by issuing a disclosure document.
Lifesaver is a public company as theres no mention of proprietary in the name. As only a public company can raise funds from the public, Lifesaver can do so by issuing a disclosure document or using documents that do not require disclosure documents as listed in ss 708 and 708AA.
The purpose of the disclosure document is to ensure that relevant and accurate information is disclosed so investors can make an informed decisions on whether to accept the offer. There are four types of disclosure document prospectus, short form prospectus, profile statement and offer information statement.
A prospectus is the most common type of disclosure document used in practice. References Lipton, P., Herzberg, ABE & Welsh, M., 2014. Understanding Company Law.. Australia: Thomson Reuters. Retrieved: 20 October 2014 Corporations Act 2001. Australian Corporations & Securities legislation. (2014 ed.). Australia: CCH. Retrieved: 20 October 2014
Issue The issue is to explore the various method of raising funds and whether there is a need for a disclosure documents in raising $11 million. Rules Companies can raise funds from the public provided that it is a public company and to raise funds, these companies are required to issue a disclosure document unless otherwise exempted to do so in s708.
The purpose of the disclosure document is to ensure that relevant and accurate information is disclosed so investors can make an informed decisions on whether to accept the offer. There are four types of disclosure document “ prospectus, short form prospectus, profile statement and offer information statement.
A profile statement is not an option as it is rarely used in practice. A prospectus is the most common type of disclosure document. A prospectus is required by the Corporations Act to be prepared in anclear, concise, and effect way , including information required by the general disclosure test, make specific disclosure required by s711 and not be misleading or deceptive. A short form prospectus is a reference to the full prospectus and is used to assist the general public.
An offer information statement (OIS) is an alternative besides the prospectus if the amount raised in a company lifetime is $10 million or less under s709. There are offers without a disclosure document as listed in s708 and s708AA. One of the offers is small scale offerings that are personal offers of securities to a small number of investors.
A disclosure document is generally not required unless it has breached the 20 investors ceiling and $2 million ceilings within 12 months. Application Figment Ltd is a public company as there no mention, thus it can raise funds from the public. Since the company does not want to prepare a prospectus, the only option is OIS. However, OIS needs a disclosure document and the amount is capped at $10 million.
The company can consider the exemptions listed in s708 and s708AA that do not need a disclosure document. If the offer is to be made to sophisticated investors, professional investors, senior managers, or relatives, the company can consider the requirements for the respective documents.
The company can consider using one or a combination of the documents in the listed exemptions to meet their needs. However because Figment is a public company, potential investors would prefer to learn more about the company and the reason for the issue of shares, thus it would be recommended to prepare a disclosure document.
Since the offer exceeds the $10 million cap for using an OIS, Figment can consider using a small scale offering for the remaining $1 million since it did not breach the $2 million breach. Conclusion To conclude, the best alternative is for Figment Ltd to use OIS in raising $10 million securities and the remaining $1 million using small scale offerings that do not require disclosure document under s708. References Lipton, P., Herzberg, ABE & Welsh, M., 2014. Understanding Company Law. (17th ed.).
Business law is also known as business law and covers corporate law at large. Commercial law covers the whole body that governs all business and commercial transactions in the whole world differing in different countries. In addition it is a subdivision of the civil edict which mainly focuses on both personal and state law concerns.
In its scope, principal and agent are majorly the titles included: carriage by sea and land, business shipping, assurance in life, accident insurance, fire, marine, bills of swap over and corporation. Under the commercial policy, the parameters of business contracts, employment procedures as well as the manufacture and trading of the merchandise is perfectly understood. In fact there has been adoption of a variety of civil codes enfolding absolute statements of each business policy in different states.
Due to the fact that the nation beneath the authority of the police force and the legislative body by its vested supremacy is under the provincial headquarters of the United States, they have responsibility of monitoring commercial activities between two or more states. Despite “many efforts to form a unified body of business law, less has been achieved thus a general adoption of a uniform commercial code for all the fifty states each with its own modifications by their legislatures”.
Bankruptcy is considered as an officially recognized position of an individual in debt or an association that has no ability to settle up creditors. “Normally in nearly all commands, bankruptcy is constrained by an order from court commonly instigated by the defaulter” (Nayler, 2005).
“It is also good to note that a defaulter not being able to pay is not only considered bankruptcy which is not similar to insolvency” (Nayler, 2005). “In UK, bankruptcy is only considered for human beings while other insolvency processes like liquidation and administration is for the organizations, although in the United States, bankruptcy is practical more largely to formal insolvency proceedings” (Nayler, 2005).
So as to okay the therapy and safeguarding of a business that may be in the throes of experiencing constraints of debts, the main focus of modern bankruptcy legislation and business debt restructuring performances do not respite on the purging of ruined entities. This is no more other than readjusting monetary and managerial structure of debtors who may be familiar with pecuniary distress.
“It is arguably not resourceful to just discharge private household debts after a definite period but to assess carefully the underlying causes in order to lessen the risk of monetary troubles to re occur” (August, 2004). It is vital to get debt advice, a well managed analysis of a particular period, financial training, and social aid to get source of income to administer domestic expenses.
“So as to obtain a debt discharge in most EU member states, partial payments are compulsory and quiet a number of requirements regarding the defaulters behavior” (August, 2004).
“On the contrary, the United States, discharge is broken in to a lesser extent” (August, 2004). Conversely, it ought to be denoted that the array is wide in the European Union with the UK almost corresponding with the US system.
“Spain, being an example, in 2003, passed a bankruptcy law which provides for debt settlement that can either reduce the debt or get an extension of the imbursement period of a five year maximum” (August, 2004). “In particular, on no account does it see the debt fulfilled. Other than adjustments that suit the debtor so long as the debt is settled by the defaulter” (Nayler, 2005).
Bankruptcy may often attract cases of swindling and this is considered a severe misdemeanor. These types of crimes are normally referred to as white collar crime. Hiding resources and papers, destruction of documents, conflict of interests, fraudulent claims, false statements or declarations, and redistribution arrangements are all considered as part of the insolvency and fraud felony.
Perjury is also when one tries to falsify the bankruptcy forms and various filings are not a crime in itself but can violate provisions of the bankruptcy law (August, 2004). “In the United States focus is put mainly on the mental state regarding the statutes of fraud bankruptcy on particular actions and by this, it is considered as a federal crime in all fifty states in U.S.” (August, 2004). In a study, Nayler (2005), proffered that.
Creditors appreciate that bankruptcy is an alternative for debtors with extreme arrears, so a good number of creditors are eager to converse a resolution so that they obtain a piece of their cash, as a substitute of the danger of losing all in an economic failure. Negotiation is a feasible option if the defaulter has enough proceeds, or has property that can be executed so that the profits can be functional against the liability. Concession may in addition purchase the defaulter some time to restructure their funds.
For a company, a reformation arranged with the creditors is a widespread move forward but this requires the accord of all creditors. Debt reformation is a procedure that permits a personal or communal company – or a sovereign body – facing money flood troubles and monetary anguish, to decrease and renegotiate its criminal amount overdue in order to perk up or reinstate liquidity and restore so that it can carry on with its process.
After court restructuring, also identified as workouts, are more and more becoming a worldwide realism. A liability reorganization is generally less costly and a preferable option to bankruptcy. Hill ( 2003), stressed that “The key expenses linked with a company arrears restructuring are the point in time and attempt to confer with bankers, creditors, vendors and tax establishments” (p. 83). Liability restructuring characteristically engage a decrease of debt and an addition of compensation conditions.
Debt is a crisis if the interest expenses are larger than the defaulter can pay for. Debt comfort naturally entails scrounging from one lender (usually a bank), at a low fee of interest, enough finances to pay back a number of advanced interest fee sum unpaid (such as credit cards).
By merging amounts outstanding, the defaulter restores numerous expenses to many diverse creditors with one monthly payment to one creditor, thereby simplifying their monthly budget. Additionally, a faster clearance of arrears usually comes about when the rate of interest is low. In such a situation, much of the defaulter’s monthly disbursement is applied against the loan’s principal (Barney, 1980). “It may be necessary to have a co-signor or other security, such as a car, if the borrower’s credit is not adequate on their own” (Barney, 1980).
If the defaulter cannot contract with their liability troubles throughout personal financial statement, cooperation with creditors, or liability consolidation, the ultimate bankruptcy option is an official suggestion or pact with the creditors.
Diverse countries have diverse lawful measures for cooperation amount overdue. The arrangement will characteristically last for up to five years, throughout this instance the defaulter makes expenditure that are dispersed to their creditors.
In Canada, a customer suggestion can be filed with the support of a government-licensed suggestion manager. Forty-five days following filing the suggestion the creditors take part in an election on the suggestion, which is well thought-out conventional if more than semi of the creditors, by dollar worth, choose to endorse the proposal.
In the UK, the individual voluntary arrangement (IVA) symbolizes the key official option to a debtors insolvency appeal (Grant, 2005). The IVA is a measurement of the bankruptcy act 1986 and fundamentally permits a defaulter to attain a recognized reimbursement agreement with their creditors generally over a 5 year period.
In most cases the defaulter does not reimburse their amount overdue in complete to their creditors though the IVA suggestion fundamentally allows for some residual arrears to be written off by the creditors at the conclusion of the 5 year compensation period. As with liquidation appeal the number of IVA suggestion has been rising speedily in the UK in current years.
In various prevalence Muslim nations, the long-established Islamic rule, Shari’a, is by rule also a preliminary place or the main source of their nationwide legislation. Whilst the substantive fulfillment with this Shari’a consent by these nations is doubtful.
This commentary observes the Islamic rule of bankruptcy in Sunni jurisprudence. There are two key denominations in Islam: Sunni and Shi’i. The considerable bulk of Muslims (87-90%) in the globe fit in to the Sunni denomination, of which there are four schools of jurisprudence, as talked about below. Given the supremacy in the majority conventional Muslim societies of one of them, the Hanbali School, this piece of writing will first and foremost rely on its practices.
Although the Islamic rule of bankruptcy with regards to Shi’a jurisprudence is particularly analogous to Sunni jurisprudence, and the four Sunni Schools are also alike, there are dissimilarities. This commentary does not speak to these disparities. Abed Awad executes law in the New Jersey, New York region centering on wide-ranging communal proceedings counting versatile matrimonial rules, money-spinning rule, Islamic statute, and international decree.
Mr. Awad has recurrently inveterate as a consultant in Islamic statute and the laws of an assortment of Arab countries before American courts. Mr. Awad is an attachment Law Professor at Rutgers Law School and Pace Law School where he educates students on Islamic jurisprudence. Robert E. Michael, a beneficiary of the American Bar Foundation, is the organization associate of Robert E. Michael & Associates PLLC, concentrating in cross-border business insolvency.
He is the previous chairman of the committee on foreign and comparative rule of the New York City Bar Association, its current Chairman of the Subcommittee on Islamic Law, and is also an Adjunct Professor at Pace Law School.
Saudi Arabia is identified to rigorously aim for Islamic rule; the Quran is its establishment. “Saudi Arabia Constitution, first article – Ayatollah Khomeini – organized the – Guardianship of the Mullahs – in Iran, creating Shi’a Islam its final basis of rule (Hill,1998). This request is not incomplete, though, to states where the clergy represents an imperative supporting function (Barney, 1980). In 1980, the Egyptian assembly adjusted Article 2 of the Egyptian constitution to utter that all prospect legislation ought to be supported on Islamic rule.
Clark Benner Lombardi, Islamic rule as a basis of constitutional rule in Egypt. “The 2003 Iraqi constitution comprises a stipulation that Iraqi rule should not infringe Islamic rule” (Barney, 1997). Even wherever the bylaw usually does not have to be conventional to Shari’a, a variety of stages of Islamic rule and courts are moreover obligatory or obtainable to Muslims all through the globe in the region of family rule and only intra- Muslim disagreements.
“What has stayed of the customary scheme in the contemporary codes is no more than a thin covering” (Hill, 2003). Penal ruling, land law, profitable regulation, torts, ceremonial statute, bankruptcy, and much more also has been completely restored by their European complements and supplemented, in owing route, by more than a few other set of laws and mouse improvement over the prior epoch of twenty to thirty years of Islamic economics—the public and top secret pecuniary dealings which claim to be presided over by Islamic rule. Islamic money and banking have full-grown from near absence to comprising just about trillion-dollar manufacturing international according to existing estimates (Nayler, 2005).
It is consequently not astonishing that Islamic economics has been the topic of a huge transaction of learned concentration. What has not up till now received the similar level of exegesis is the thrashing side of the equation the laws and rules of Shari’a that relate when something goes incorrect.
Islamic debtor-creditor and insolvency rule is suitable to come into much sharper center now that the surge elating all ships has stopped up increasing and, in numerous regions, is departing.
This editorial is proposed to offer an exhibition and psychoanalysis of the essential precepts of this surface of Islamic business law and, in doing so, contrast them to the essential rudiments of Western liquidation, particularly that of the majority winning and followed one, Chapter 11 of the U.S.
Bankruptcy Code.45 Beyond all, this piece of writing will talk about what the authors deem to be the five most important ideas that strengthen or comprise the groundwork of the Islamic law of insolvency:
- the ban of riba (interest), and the associated need of a hypothesis of the time worth of cash;
- the compulsion to be communally accountable;
- the heavenly instruction to disburse all of one’s amount overdue if you are able to do so, with bereavement being the only basis of a concluding emancipation;
- the nonattendance of an incomplete legal responsibility or entity protecting idea;
- and the non-attendance of theories of weak possessions and loads of varieties of non-possessory human rights ordinary in other lawful systems.
These philosophies are entwined in the composition of Islamic dealing and fiscal decree. Debtors, the media, court people, creditors, and the common community are offered diverse aspects of the federal bankruptcy laws through the bankruptcy basics.
Most of the resolutions to the commonly solicited questions regarding the whole process are also offered. Bankruptcy basics offer a general outlook of the information only. Even though much has been brought up to ensure that the details enclosed are accurate as of the date of publication, it is not yet considered an authoritative statement of the law on any particular topic.
In the United States, the executive office and the segment of bankruptcy judges are not allowed to give any financial advice. Such guidance can be obtained from a capable legal representative, accountant, or economic adviser.
Article I, Section 8, of the United States constitution approves congress to endorse “Uniform laws on the subject of bankruptcies.” Beneath this allowance of power, congress endorsed the “Bankruptcy Code” in 1978. According to August (2004),
The bankruptcy code, which is codified as title 11 of the United States code, has been attuned a number of times from the time when it was ratified. It is the unvarying innermost rule that governs all bankruptcy cases. The different peculiarities of the modus operandi are normally determined by some policies that touch on bankruptcy. (p. 99)
The bankruptcy regulations comprise of a set of bureaucrat forms for use in insolvency cases. The bankruptcy code and bankruptcy rules (and local rules) put forwards the official lawful measures for dealing with the balance due troubles of persons and businesses. There is a bankruptcy court for every legal region in the nation. All states have one or more districts. There are 90 bankruptcy districts crossways the nation.
The “court executive with decision-making authority over centralized bankruptcy cases is the United States bankruptcy adjudicator, a legal officer of the United States district court” (Porter, 1998). The bankruptcy moderator may well make a decision on any stuff linked with a bankruptcy case, such as eligibility to file or if a defaulter ought to get hold of a release from debt.
A great deal of the bankruptcy procedure is administrative, though, and is carried out from the federal court. In cases in chapters 7, 12, or 13, and occasionally in chapter 11 cases, this directorial itinerary is agreed to by a trustee who is selected to supervise the case.
A debtor’s partaking with the bankruptcy judge is by and large, exceptionally constrained. A distinctive chapter 7 cheat will not show up in court and will not witness the bankruptcy judge except an opposition is raised in the case. A chapter 13 defaulter might only have to come out prior to the judge of bankruptcy at an arrangement confirmation trial.
As a rule, the single-handed representative congregation at which a nonpayer should show is the assembly of creditors, which is generally held at the offices of the U.S. trustee. This gathering is casually called a “341 meeting”.
This is mostly for the reason that section 341 of the Bankruptcy Code needs that the defaulter attends this conference so that creditors can question the defaulter concerning the total unsettled and possessions. One critical intention of the national bankruptcy laws endorsed by Congress is to offer debtors a monetary “fresh start” from the arduous computation unpaid.
The Supreme Court prepared this point regarding the reason of the bankruptcy law in a 1934 decision. A great opportunity in life is usually created for the candid debtor even though unlucky and a clear field for future effort, unhampered by the pressure and discouragement of preexisting debt (Grant, 2005).
This aim is expected throughout the bankruptcy liberation, which “frees debtors from own responsibility from precise debts and forbids creditors from forever taking any exploit not in favor of the defaulter to gather those debts” (Grant, 2005).
The freedom in bankruptcy is elucidated in a description of questions and answers. The paper then disputes the point during emancipation, the degree of the emancipation, objection to the unrestraint and revocation of the emancipation. In addition it explains what a defaulter can do if a creditor tries to collect a free debt after the bankruptcy case is completed.
“Six fundamental types of bankruptcy cases are provided for under the Bankruptcy Code. The cases are conventionally given the names of the chapters that illustrate them and in Chapter 7, entitled insolvency, considers an arranged, court-supervised modus operandi by which a trustee assumes the possessions of the debtor’s land, condenses them to hard cash, and makes distributions to creditors, focus to the debtor’s right to keep certain let off possessions and the rights of protected creditors” (Porter, 1998).
Due to more often than very small or no non-exempt belongings in the largest part of the chapter 7 type cases, the insolvency of the debtor’s worldly goods may not come to pass. The cases are normally referred as “no-asset cases.”
A creditor with an unprotected declare will get an allocation from the bankruptcy manor only if the case is an benefit case and the creditor files an evidence of assert with the bankruptcy court. Mainly in chapter 7 cases, if the defaulter is an entity, he or she obtains a discharge that frees him or her from own accountability for assured debts that are not chargeable (Hill, 2003).
The defaulter more often than not, obtains a discharge in a few months following the filling of the petition. Adjustments to the bankruptcy code endorsed in to the bankruptcy abuse prevention and consumer protection act of 2005 necessitates the relevance of a “means test” to find out whether self consumer defaulters meet the criteria for relief under chapter 7.
If such a debtor’s profits are in surplus of convinced thresholds, the nonpayer may not be entitled for chapter 7 reprieve. Chapter 13, allowed adjustment of debts of an entity with usual income, is intended for an entity defaulter who has a normal basis of profits. Chapter 13 is frequently liked to chapter 7 for it allows the defaulter to maintain a costly asset, such as a home, and it also permits the defaulter to suggest a “plan” to pay back the creditors for a period of three to five years.