Cengage Advantage Books: Law for Business 18th Edition by John Ashcroft ,Janet Ashcroft

Exercise 2

James Roemer and James Featherstonhaugh established R F, a professional corporation for the practice of law. Later, Roemer signed a loan agreement for R F to Chemical Bank, secured by a promissory note. Featherstonhaugh resigned from R F, and eight months later Three Feathers Inc., a small corporation Featherstonhaugh and his wife owned, bought R F's note from Chemical. Three Feathers promptly declared R F in default on the note and sued Roemer defended, saying Featherstonhaugh had fraudulently induced him to sign the agreement. Should this defense be valid against Three Feathers?