Gareth Thomas was a director of Middleton Manufacturing Inc. The company put out a call for bids from suppliers for a multimillion dollar order of the raw materials needed for the coming year. Fiona Ferguson, Thomas's wife, owned and operated a small independent bookstore. Business was excellent, and she planned to expand, taking over the premises next door. A few days before the Middleton board was due to make a decision on it contract, Ferguson was contacted by George Hammond, one of the suppliers who had submitted a bid to Middleton.

Hammond offered Ferguson a loan of $30,000 at 2 percent interest, to be repaid over 10 years. "That'll give you room for a book or two!" he said.

a) Does this loan create any legal problems for Thomas and, if so, do they depend on whether

Hammond's bid is the successful one?