PRE-FINAL EXAM
OBLIGATION AND CONTRACT
1. Scott asked Jenny to cooperate with the Bureau of Internal Revenue (BIR) in further lowering
the company's tax obligations since he thought she was an accountant. As this was going on,
Jenny took advantage of Scott's misplaced confidence and persuaded him to accept a sizeable
number of the company's shares in return for a 50% reduction in the tax burden. Is it legal for
Scott to have given Jenny a sizable portion of the company's shares? If not, why not? The
transfer by Scott to Jenny of a significant portion of the company's shares is invalid. A person's
or a business's tax burden is not expected to be decreased by agreements made between two
people without consulting the appropriate authorities. This indicates that Scott's activities
2. Jasper is unwilling to consider selling his company, but Nio is highly interested in buying it. Since
Nio is accustomed to having his way, he blackmailed Jasper by threatening to use his contacts
with the Department of Trade and Industry (DTI) to have Jasper's company shut down. What
should Jasper do to reclaim the company that he sold to Nio out of fear? What should the
foundation of his treatment be?