First Principles of Business Law

Question 10.

Assume that Peter has business assets (that is, equipment) worth a total of $10,000. The only money that he has is $10,000 in his personal account. Peter also owns a family car worth $20,000 and the house that he and his family live in. Assume also that Peter is found liable to pay damages of $40,000 to Miles.

(a) Because the events took place in the course of Peter's business, Peter is only liable to pay damages to the extent of his business assets. His personal money and assets are not available to pay business debts.

(b) Even though the events took place in the course of Peter's business, Peter's personal assets are available to pay any debts incurred, including the payment of damages.