Question
My Pie, LLC operates a casual restaurant that features pizzas baked in a wood-fired oven, cookie-and-ice-cream desserts, and craft brews. 1. Negotiable Instruments. Every four
My Pie, LLC operates a casual restaurant that features pizzas baked in a wood-fired oven, cookie-and-ice-cream desserts, and craft brews.
1. Negotiable Instruments. Every four weeks, Fresh Food Distribution Network sells My Pie the food and beverages that the restaurant's owners, Norah and Odell, believe will meet its needs for a month. My Pie's orders differ from month to month, particularly when the nearby campus of State University's is in session, one of the local sports teams is enjoying a winning season, or a special event, such as the county fair, is being held in the community. The price of a monthly My Pie order from Fresh Food is normally about $30,000. The terms require payment within sixty days. One month, Fresh Food asks for cash on delivery for a $32,000 order. My Pie wants the usual term of payment in sixty days. What can Fresh Food and My Pie do that will satisfy both parties?
2. Transferability and Holder in Due Course. To expand to a second location, My Pie obtains a loan from its point-of-sale system provider, Bistro Technology. The loan takes the form of a merchant capital advance (MAC). The restaurant agrees to repay the MAC according to a certain percent of gross sales per month, which means that the payments vary with the amount of business. On My Pie's behalf, Norah and Odell sign a note payable to Bistro, which subsequently indorses the note and transfers it to Credit Investments, Inc. Due to some unexpected and costly repairs to the kitchen in My Pie's new location, several monthly payments on the note are skipped. Credit Investments files a claim with a court for an order to collect funds from the restaurant's bank account. Norah and Odell argue that they did not sign any document promising to pay Credit Investments and thus the claim is invalid. Is Credit Investments entitled to enforce the note?
3. Liability, Defenses, and Discharge. The women's basketball team at State University wins the regional playoffs. Team Logos, a local sporting goods store, wants to contribute to the university's celebration of the winning team. Michelle, the store's manager, places an order with My Pie and asks Leif, a Team Logos employee, to pick up and deliver the pizzas to the campus. Michelle writes a check drawn on Team Logo's account and payable to the restaurant, but leaves the amount blank for Leif to fill in with the price of the order. At My Pie, without Michelle or Team Logo's knowledge or consent, Leif fills in the check for $100 over the price. Kelly, the host responsible for take-out orders at the restaurant, takes the check and gives Leif the pizzas, plus $100 in cash. Can My Pie enforce the check?
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