Business Law Question James Thurn and Deryl Hines incorporated their feedlot bus
ID: 442719 • Letter: B
Question
Business Law Question
James Thurn and Deryl Hines incorporated their feedlot business as Hines & Thurn Feedlot, Inc., a corporation. The corporation made three livestock purchases from Zumbrota Livestock Auction Market totaling over $540,000. Zumbrota sent invoices addressed to “Thurn-Hines Lvstk” or “Thurn-Hines Livst.” The corporation paid for the livestock with three checks. Printed on each check was “Thurn-Hines Livestock, Hines-Thurn Feedlot, Inc., Box 555, Edgewood, IA 52042.” The checks were signed by Jean Offerman, a corporation employee, but did not indicate the capacity in which Offerman signed. When the corporation stopped payment on the checks, Zumbrota sued Thurn and Hines individually for the amount of the livestock purchases, claiming that Thurn and Hines were agents for an undisclosed principal. Zumbrota’s vice-president argued that he knew the business only as “Thurn & Hines.”
Were Thurn and Hines liable to Zumbrota?
Explanation / Answer
No. Thurn and Hines are not liable to Zumbrota, as it was a misunderstanding on the part of Zumbrota not Thurn and Hines. Zumbrota assumed to know the business as Thurn and Hines instead he should have run a background check before the purchase about the business as Thurn and Hines didn’t give any misleading information about the business.
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