written response to problem 1

For the written response to the problem, I would encourage you to try to show that you can identify and explain the legal issue in the problem, tell me (briefly) what the relevant rule is (or factors that a court might consider), and apply the rule to the facts in the problem to arrive at a conclusion. As mentioned in class, I am not looking for the "correct" answer - there may not be a correct answer - but rather an explanation of how you would respond to the problem and then support your answer by referring to relevant legal principles and facts in the problem.

One way to think about this is via the "IRAC" method: Issue, Rule, Analysis, Conclusion - meaning try to identify the legal issue, explain the general rule applicable to the legal issue, analyze the facts in light of the issue and rule, and then reach and support your conclusion based on the foregoing.

For most problems you should be able to answer in a page or less, e.g. I don't need you to restate the facts and I don't need you to copy the textbook - instead I want you to develop comfort with the legal issues and try to reach a conclusion.

1. Jonas Bravario hires Suzanne Hermano, a securities broker, to manage his $700,000 portfolio of securities. When Bravario managed his own investments, his in- vestment strategy was to own a large number of dif- ferent companies, with no one company representing more than 5 percent of his total investments. Bravario also purchased all his investments for cash and did not borrow money to finance the purchase of any invest- ment. Hermano is aware of Bravario's historical in- vestment strategy, which Bravario informed Hermano that he wanted to continue in the future. Nonetheless, Hermano opts to purchase 1 million shares of Enron Corporation for $70,000. To finance the purchase, Hermano sells $40,000 of Bravario's current invest- ments and borrows $30,000 from Wells Fargo Bank in the name of Bravario. The interest rate on the loan is 10 percent. When Bravario discovers the purchase and the loan, he attempts to repudiate both contracts. Is Bravario liable on the Enron purchase and loan contracts