JURI 530Page 1of 3 PREDICTIVE OFFICE MEMOASSIGNMENT INSTRUCTIONSOVERVIEWNow that you have learned about the basic building blocks of contract law, and how court use legal rules to reach legal conclusions about disputes, you are ready put your knowledge of these rules and this process to practice. One set of legal rules you have learned about is the Statute of Frauds, and this assignment will give you a chance to think, learn, write, and exercise judgment about how the rules and policies that make up the Statute of Frauds doctrine might resolve a dispute about two parties. Onceyou finish the assignment you will have a better understanding of the Statute of Frauds and more experience performing legal analysis and writing.INSTRUCTIONSInstructions: Write a 3–5–page, single–spaced, predictive memoin current Bluebook formatassessing the fact patternbelow. Your memo mustinclude 3separate sectionsper question for each of the 3questions posed at the conclusion of the fact pattern. The purpose of the memo is to predict how a court might apply the laws that determine whether a writing is required to enforce a contract in this situation. As you write your memo, be sure to identify the legal rule or rules upon which you base your prediction. For purposes of this memo, you may cite your textbook for propositions of law(either a reference to a case, a Restatement (Second) of Contracts provision, or a Uniform Commercial Code provision) that require citation, unless a more authoritative proposition is referenced in the textbook for the same proposition of law. Also, be sure to discuss all of the relevant facts and describe how the facts impact your prediction. Identify any weaknesses or uncertainty in your prediction; anticipate and evaluate the merit of any opposing arguments.Fact Pattern: Business Capital Solutions, Inc. (“BCS”) is a small lending institution that specializes in providing loans to small businesses. The loans are typically short–term loans designed to provide operating funds to small businesses in tight times, when they are short on the cash needed to pay operating expenses and generate profits. These short–term loans often take the form of a “line of credit.” The line of credit has a limit, but the borrower is allowed to borrow on the line of credit, as needed, up to a determined maximum loan amount. The line of credit often has a very short term, so that the entire loan has to be repaid no later than the end of the term, which might be, for example, 1year from the date BCS extends the line of credit to the borrower.On January 3, one of BCS’s commercial lending officers, Marie Klokov, meets with Louis Price, the president of a small construction company. Price’s company, HardHat, LLC (“HardHat”), generally pays out its annual profits as bonuses to key employees, and it also makes equipment purchases at the end ofyear; consequently, in the first few months of every year HardHat has very little cash in its bank account, and needs extra cash to pay employees and buy materials and supplies to perform contracts during the first months of the new year. Price talks to Klokov about getting a line of credit from BCS for the new year. Klokov and Price discuss a $250,000 line of credit. The two propose that the entire balance would have to be repaid on or before December 31. Price says, “That should be no problem. In fact, Ithink we’ll have anything we borrow repaid by June, when we’ll get paid on a couple of big projects we are working on.” At the meeting,
JURI 530Page 2of 3Price provides a loan application, together with copies of HardHat’s annual financial statements and tax returns from the past 3years.After reviewing the application and supporting documents, Klokov tells Price that she expects that the Loan Committee, which is responsible for the final decision on whether to make the loan or not, will probably have some concerns about loaning that much to HardHat, which does not own any real estate or have any other valuable assets that could serve as security for the loan. Klokov says, to Price, “Would you be willing to personally guarantee the loan’s repayment?” Price says, “Absolutely, I would be willing to agree to guarantee that HardHat will repay the loan. If the company can’t pay it, I’ll do it. However, if BCS will loan the money to HardHat without a personal guarantee, I’d prefer that.” Klokov agrees that she’ll submit the loan application to the Loan Committee without any guarantee, and if the Committee rejects the application, she will resubmit it with Price’s promise to guarantee the loan.The next day, Klokov submits the loan application and documentation to the Loan Committee. The committee, as Klokov anticipated, has grave concerns about lending so much money to HardHat, which leases, rather than owns, most of its equipment and has no other assets it can use as security for repayment of the loan. The committee rejects the application. Klokov resubmits the application, together with a personal financial statement dated January 3. The personal financial statement includes Price’s name and address and a list of all of Price’s personal assets and liabilities. At the end of the list is a statement: “The undersigned certifies that this Personal Financial Statement includes a complete, honest, and accurate statement of all of my personal assets and liabilities.” A signature line follows that statement, and Price’s signature is on the signature line. Klokov tells the committee that Price is willing to personally guarantee repayment of the loan. The committee grants the application.Klokov calls Price to give him the good news. Price says, “Great. When can I get some money?” Klokov tellshim that he just needs to stop by the BCS office. “I’ll need a representative of HardHat to sign the loan agreement, and I’ll need you to sign the personal guaranty. Once they are both signed, I can get you a check for whatever amount you’d like to borrowon the line of credit.” Price stops by the BCS office the same day. He signs the loan agreement “as president of HardHat, LLC.” The separate Personal Guaranty Agreement is ready for him to sign, but Price does not sign it, and the representative of BCS who was holding the loan documents fails to require that he sign it. Price leaves the office with a copy of the signed loan agreement, the unsigned personal guaranty, and a check drawn on the line of credit in the amount of $40,000.BCS does not realize thatthe personal guaranty has not been signed until Klokov happens to review the file1month later. She then contacts Price and leaves several messages asking him to sign the personal guaranty, but Price refuses to take her calls and does not return her messages.In your predictive memo, please address 3questions:1.Is the Personal Guaranty Agreement between BCS and Price an agreement that falls within any of the categories of the Statute of Frauds? Fully explain your answer.2.For this part only, assume that the Personal Guaranty Agreement is an agreement that is within the Statute of Frauds.Is the writing requirement satisfied by any of the written documents referenced in the hypothetical?3.For this part only, assume that the Personal Guaranty Agreement is within the Statute of Frauds, and that none of the written documents referred to in the hypothetical satisfy the
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