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leonid [27]
3 years ago
10

David Wallace was the president, chairman of the board of directors, and majority shareholder of Paper Imports, Inc. Acting as p

resident, David Wallace negotiated a series of contracts that caused the corporation serious economic losses. As president, David Wallace failed to exercise the care of a reasonably prudent person acting in similar circumstances.When substantial economic losses began to pile up, David Wallace insisted that the corporation breach a contract with Dunder Company in favor of a larger contract with Mifflin Enterprises. David Wallace hoped to reverse Paper Imports, Inc. economic decline through this contract with Mifflin, but the attempt failed. Paper Imports, Inc. insolvent and failed.There were two lawsuits against David Wallace, (1) a creditor of Paper Imports, Inc. sued David Wallace alleging that the negligence of David Wallace had caused Paper Imports Inc. to fail to pay the creditor, and (2) Dunder Company sued David Wallace claiming that David Wallace caused Paper Imports, Inc. to breach its contract with Dunder.Who would win in each of these lawsuits?
Business
1 answer:
Paladinen [302]3 years ago
8 0

Answer:

The answers to the two questions are detailed in the explanation;

Explanation:

1.In this first case, David Wallace may possibly win, since a single creditor as a witness that due to the negligence of the director of the company did not receive his payment is not enough evidence for a lawsuit.

There should be more creditors who are dissatisfied with this situation, and it must also be analyzed what were the real causes that led to the company not having made the corresponding payment to this creditor.

2.In this second situation, the company Dunder Company may possibly win, since the corporation breached a previously established contract, this establishes the basis for a lawsuit in which Papers Import must possibly comply with the provisions of the contract or compensate the damages caused to the Dunder Company.

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The correct answer is the option A: Diseconomies of scales.

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