Dennegar Liability by Kara Silvia

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Slide Notes

Good Afternoon, my name is Kara Silvia and today I will be discussing whether Lee Dennegar is liable for credit card debt accrued by Mark Knutson per the 2007 New Century Financial Services v. Dennegar case.

Dennegar Liability

Published on May 02, 2021

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PRESENTATION OUTLINE

DENNEGAR LIABILITY

Kara Silvia
NEIB-Cambridge College
MBA530 Legal and Ethical
Dr. William Aquilino

Photo by allenallen1910

agenda

Overview of case
Contract Law
Summary
References

We will first be reviewing the main points of the case, then we will move on to discuss contract law. We will then summarize all of the laws and why it makes Dennegar liable for the debt accrued on the AT&T credit card.

overview

2007 New Century Financial Services v. Dennegar case
$14,752.93 debt to an AT&T credit card
Dennegar had previously given Knutson control of all of his finances, his mail and allowed him to forge his name on checks
Dennegar appointed Knutson as an agent for financial decisions

In the 2007 New Century Financial Services v. Dennegar case, they argue whether Dennegar is liable for a $14,752.93 debt to an AT&T credit card. The credit card was opened by Mark Knutson in 2001 with Lee Dennegars’ name. Dennegar had previously given Knutson control of all of his finances, let him handle all the mail sent to the residence, and let him forge his name on checks (Fisher, n.d.). The judge agreed that since Dennegar had appointed Knutson as an agent for his financial decisions, that Knutson was authorized to apply for this credit card and therefore, Dennegar will need to take on the debt.

contract law

A valid contract is put in place when there is an offer and an acceptance (Lunenburg, 2011)
Per UCC 2-207, as long as there are no changes after the original verbal agreement, the agreement is effective (Bix, 2012).

A valid contract is put in place when there is an offer and an acceptance (Lunenburg, 2011). When Knutson filled out the credit card application and accepted the disclosures in Dennegars’ name, they entered a contract with AT&T. There is an additional contract that was made, which is the oral contract between both Knutson and Dennegar. In regards to the UCC 2-207, as long as there are no changes after the original oral agreement, the agreement is effective (Bix, 2012). Based on the information provided in the case, it does not seem as though any additional changes were made after Dennegar allowed Knutson to take control of his financial affairs.

contract law

Certain obligations are passed down from the principals to the agents (Mejia, 2019)
The Truth in Lending Act provides protection for a card holder if transactions on a card are unauthorized (Caulder, 2014)

With this, Dennegar and Knutson entered into a principal/agent relationship within shareholder theory. Within this, certain obligations are passed down from the principals to the agents (Mejia, 2019). In this case, it means Dennegar is liable for the AT&T credit card debt, as he allowed Knutson to perform these transactions. The Truth in Lending Act protects a cardholder if transactions on a card are unauthorized and if the cardholder alerts someone that they did not make these purchases themselves (Caulder, 2014). Dennegar did not state that these transactions were unauthorized promptly and also stated that some of the purchases on the credit card were ones he authorized Knutson to make (Fisher, n.d.). This proves that at least to some level, Dennegar knew that Knutson was making these purchases and either knew they were made with a credit card or didn’t question how they were paying for these.

summary

Dennegar should be liable for the debt
The verbal agreement between Dennegar and Knutson allowed Knutson to take control
Valid contract made by the agent with AT&T

To summarize, Dennegar should be liable for the debt accrued on the AT&T credit card. This is due to the relationship and access he gave Knutson. Dennegar put himself in a position where he could be taken advantage of. The verbal agreement between the two parties allowed Knutson to take full control of Dennegars' finances. There was also a valid contract made by the agent with AT&T with authority from the principal. Dennegar allowed someone to accrue this debt with his name and therefore will be liable to pay it off.

References

Bix, B. (2012). Contract Law : Rules, Theory, and Context. Cambridge University Press.
Caulder, J. L. (2014). Avoiding the Nuclear Option: Balancing Borrower and Lender Rights Under the Truth in Lending Act’s Right of Rescission. Washington & Lee Law Review, 71(3), 1925–1977.

references

FISHER, J.A.D. (n.d.). NEW CENTURY FINANCIAL SERVICES INC v. DENNEGAR. Retrieved from http://caselaw.findlaw.com/nj-superior-court-appellate-division/1263011.htm...
Lunenburg, F. C. (2011). The Law of Contracts: What Constitutes a Contract? FOCUS on Colleges, Universities & Schools, 6(1), 1–4.

references

Mejia, S. (2019). Weeding Out Flawed Versions of Shareholder Primacy: A Reflection on the Moral Obligations That Carry Over from Principals to Agents. Business Ethics Quarterly, 29(4), 519–544. https://doi.org/10.1017/beq.2019.18