On February 1, Hoffman made an offer to subscribe to 100 shares of $10 par value common stock of Pack Corporation stock for $70 per share.  On March 1, Pack Corporation agreed to the subscription offer.  Under the stock subscription contract, Hoffman paid $2,000 immediately and agreed to pay $1,000 by April 15 with the remainder due on June 1.  On May 15, Pack Corporation was forced into bankruptcy and the creditors are seeking payment from Hoffman. Which of the following is correct concerning the amount the creditors can require Hoffman pay?
A. None because he has paid in more than the $10 par value for 100 shares of stock.
B. None because although he has not paid the full subscription price, he fulfilled his contract fully up until the date of the bankruptcy.
C. None because Hoffman is not yet a shareholder until he fully pays for the stock.
D. $4,000 because this is the amount Hoffman still owes the corporation under the subscription agreement.
Answer:D
D is corrent. Once both Hoffman and Pack agreed to the subscription agreement, Hoffman became liable to the corporation for the full subscription price. The creditors can be paid with this money.
A is incorrect because the subscription agreement was for the full $70 per share, not just the $10 par value.
B is incorrect because the remainder of the contract is enforceable.
C is incorrect because once they agree to the subscription contract, this contract is fully enforceable against Hoffman.