QUESTION
what law would this be? and how would they proceed in court?
Asked on Apr 09th, 2012 on Business Law - Georgia
More details to this question:
David Whiddle and Billy Lougher owned Christmas Unlimited, Inc. Helen Reddy delivered $8,340.87 worth of ornaments to the store for which she was not paid. Reddy proved that Whiddle and Lougher owned the store, managed its operations, and personally ordered the ornaments. Reddy claims they are personally liable for the debt owed to her by Christmas Unlimited. Explain whether or not Whiddle and Lougher are personally responsible for this debt.
1 ANSWER
Labor and Employment Attorney serving Atlanta, GA
2 Awards
The answer to your question depends on the contract itself. If the contract to order the ornaments was entered into by Christmas Unlimited, Inc., then that is the legal person that you have to sue. Its owner-managers are not guarantors of the corporation's debts unless you have a written agreement under which they become guarantors of the corporation's debt. Since they are not guarantors they are not personally liable for the corporation's debts This is part of the protection afforded by adopting the corporate form of business.
By the way, this appears to be a law school test question.
Michael Caldwell
404-979-3150
Answered on Apr 10th, 2012 at 12:32 PM