Managing Director

Question 1

Alastair is the major shareholder and managing director of EDC Ltd. To obtain capital for the business Alastair has provided a personal guarantee and used his home to secure a mortgage to Fidelity Finance. When Alastair’s father Gerald retires as an insurance broker, Gerald becomes involved in EDC and helps out with its administration and the accounts. To fund further expansion of EDC, Gerald and his wife Elaine also provide personal guarantees to Fidelity. Gerald has direct communication with Fidelity about EDC’s finances including the guarantees.

EDC subsequently runs into difficulties and goes into voluntary liquidation. Fidelity seeks to enforce the guarantees and exercise its rights under the mortgage.

When Gerald and Elaine learn that the guarantees are being called upon they are horrified. Gerald says that he only agreed to give a guarantee because he was pressured by Alastair and he was emotionally dependent on him. Elaine says that as her husband and son were both involved in the company that was good enough for her and that when it came to signing the documents she did not need to ask what they were for.

Applying the principles of undue influence, advise Fidelity whether it will be able to enforce its guarantee against (a) Gerald and (b) Elaine. Refer to a case to support your answer. (15 marks)

Question 2

Read the posted article ‘Social and Cultural Aspects of Drinking’ and answer the questions below.

1. According to the article, how do alcoholic beverages develop symbolic roles? Describe how alcoholic beverages can be a situational definer, a status indicator, a statement of affiliation, and a gender differentiator. (5 marks)
2. The article discusses the role of drinking places and the impact of drinking culture. What does the article state as the 4 significant general conclusions that can be drawn about the role of drinking places on social and cultural drinking habits? (4 marks)
3. The article refers to significant transitions that are ritualised in some form in every society. Specifically, the article refers to: Life-Cycle Transitions, Life-Style Transitions, and Habitual Transitions. Explain these 3 transitions. (3 marks)
4.  Considering your personal background and experiences, describe the role alcoholic beverages play in your social and cultural events. If you come from a cultural background were alcohol is not consumed, explain the reasons why it is not accepted and list the beverages you do consume at social and cultural events. (3 marks)