Zlotnik Incorporated a Company Shortly After Graduation

question 134

Multiple Choice

Zlotnik incorporated a company shortly after graduation. The company bought a truck and a computer. Short of operating capital, the company, through its agent Zlotnik, borrowed $10,000 from the bank. In consideration for its loan, the bank took, in addition to the company's promise to pay the bank both principal and interest, a mortgage of its truck and computer. The company made its payment each month without incident. For reasons still unknown, the stock market took a tremendous fall, which caused the officer of the bank to call Zlotnik and ask him to guarantee the company's debt. The company was doing very well, so Zlotnik agreed to be guarantor of the debt. His oral assurances were sufficient for the bank officer. On these facts, which of the following is true?

• A) Zlotnik's promise to guarantee the debt is void because the guarantee itself is not in writing.
• B) All guarantees and indemnities must be in writing and under seal to be binding.
• C) Zlotnik's promise to guarantee the debt is enforceable wholly on the grounds that the Statute of Frauds with its writing requirement has been repealed.
• D) Zlotnik's promise to guarantee the debt is unenforceable because it is not supported by any consideration flowing from the bank to Zlotnik.
• E) Because Zlotnik's promise is a guarantee and not an indemnity, he automatically becomes the legal person primarily liable on the debt; the company becomes secondarily liable.

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Definitions:

Optimal Strategies

Approaches or methodologies determined to be the most effective and efficient in achieving specific goals or outcomes, often within the context of games, economics, or operations research.

Level Scheduling

A production strategy that aims to maintain a consistent production rate or workload, smoothing out peaks and troughs in demand to optimize operations.

Pure Chase Strategy

A production strategy where the production rate is adjusted to match demand, minimizing inventory levels at the cost of potentially greater adjustment costs.

Part-Time Workers

Employees who work less than the standard full-time hours, typically offering flexibility and cost savings for businesses while accommodating the workers' other commitments.