unt Saviour presents the note to Rob for payment who learns from him that he has filed bankruptcy and has been discharged of all his debts, including this note he originally gave to his buddy Ted. Nice guy! So what recourse does Aunt Saviour have to try and collect her money? Can she pursue her nephew Gullible, if so why? Can she pursue Ted, if so why? If she pursues Gullible and prevails does he have any recourse against Ted? If so, why?
Rob asks his good friend Ted to borrow $5,000 and says he will pay it back to him in 6 months with 8% interest, meaning Rob will owe Ted $5,200 if he pays it back at that time. Ted asks Rob to "make" a promissory note payable to Ted stating these terms. Rob does prepare the "note" and signs and gives it to Ted and at the same time Ted gives Rob the $5,000. Ted in need of money unexpectedly, because he loses his job, contacts his buddy Gullible, and asks him if he will buy the note at a discount of $4,800. Gullible accepts and stands to make a nice profit when the note owed by Rob comes due. When Gullible gives Ted the $4,800, Ted writes on the note "Without Recourse" and signs his name and tenders the note to Gullible. Gullible does see Ted write this on the note, but is not sophisticated with regard to legal lingo, and thinks nothing of it. He therefater gets nervous and thinks maybe he should sell the note himself right away. He calls his aunt Saviour who says she will buy the note from Gullible. Gullible writes on the note: Pay to Saviour and signs his name Gullible. Aunt Saviour gives Gullible $4,800 and takes the note from him. On the due date, Aunt Saviour presents the note to Rob for payment who learns from him that he has filed bankruptcy and has been discharged of all his debts, including this note he originally gave to his buddy Ted. Nice guy! So what recourse does Aunt Saviour have to try and collect her money? Can she pursue her nephew Gullible, if so why? Can she pursue Ted, if so why? If she pursues Gullible and prevails does he have any recourse against Ted? If so, why?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
