Sometimes, business disputes arise because one party claims to have sufficient funds to satisfy the requirements of another. A franchisee often needs funds to acquire a franchise. An investor in a proposed scheme needs sufficient funds to participate in the scheme. A business partner requires funding to ensure that they make a positive contribution to the financial well-being of such a partnership.
Man Of Straw
In legal terms, a man of straw is best defined as a person who wishes to undertake a financial commitment without adequate means. In other words, a front man who cannot be relied on to honour their financial commitments, especially because of limited resources.
When the individual does not have access to the funds for which they claim they do, a commercial dispute is likely to arise. The court rolls are filled with litigation between companies and individuals in which such individuals are sued for not being able to fulfill their financial obligations.
How do you identify a man of straw?
The most effective means is to source background intelligence of an individual and conduct discreet enquiries to determine their business reputation and known moral character. From these discreet enquiries, an initial understanding of the person can be gathered.
Next, open source intelligence (OSINT) can be gathered from various online sources and proprietary databases. By analyzing such intelligence, a better understanding of the person’s lifestyle, commercial experience and business dealings can be achieved.
Lastly, developing a solvency profile by conducting financial investigations will provide you with a thorough understanding of the subject’s net worth.
As a corporate intelligence firm, with over 20 years experience of conducting sensitive investigations, we can help you sort the wheat from the chaff. In this way, you will be able to identify a man of straw and advise your client before they get burnt.