Law Management/ Business Law The Eliason family owned a majority (5,238 shares)
ID: 423270 • Letter: L
Question
Law Management/ Business Law
The Eliason family owned a majority (5,238 shares) of the 9,990 shares of Brosius-Eliason Co., a building and materials company, with James Eliason (3,928 shares) and his sister Sarah Englehart (1,260 shares) holding the control back. The Brosius family owned a total of 3,690 shares. Frank Hewlett owned the remaining 1,062 shares. ON July 31, James Eliason executed a Proxy giving his daughter, Louise Eliason, authority to vote his shares. Only in the notary public's acknowledgement verifying James's signature did the proxy state that it was irrevocable.The body of the proxy, the part signed by James, did not state it was irrevocable. Two weeks later, James and his sister Sarah made a voting agreement that ensured Eliason family control over the corporation by requiring their shares to be voted as provided in the agreement.The voting agreement was irrevocable, because it was coupled with an interest in each other's shares. Soon after, Sarah and Louise had a falling out when Louise tried to assert her family's control of the company. Consequently, Sarah voted her shares with the Brosiuses and Hewlett in violation of the agreement with James. She argued that she was not bound by the voting agreement with James on the grounds that Jamescould not make the agreement, because he had given Louise an irrevocable proxy two weeks earlier. Was Sarah right?
Explanation / Answer
Irrevocable agreements are the agreements that cannot be altered once they are signed . For this the statement of both the sides is necessary. In case of giving proxy to his daughter James did not make any statement of irrevocability . But in voting agreement both accepted it is irrevocable. Hence Sarah is not right because James never made the first agrrement irrevocable .
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